Overcoming Information Asymmetry in Job Search : The Power of a Reference Letter

The labor market is characterized by information gaps between work seekers and prospective employers, particularly when it comes to hiring low-skill entry level workers. Information asymmetries about workers’ skills can result in poorer matches, lower productivity for employers, and increased inequity for the unemployed. One approach to resolving the asymmetry is introducing a formal referral system: reference letters from former employers. The authors finds that reference letters improve firms’ screening ability and employment outcomes, especially for women. Despite their high value, the use of reference letters in job applications is low, partly due to work seekers underestimating their value.

Bibliographic Details

Main Authors:	Carranza, Eliana, Pimkina, Svetlana
Format:	Brief biblioteca
Language:	English
Published:	World Bank, Washington, DC 2018-04
Subjects:	JOB APPLICATION, JOB SEARCH, YOUTH EMPLOYMENT, LABOR MARKET, REFERRALS, GENDER GAP, GENDER BIAS, JOB REFERRAL, WRITING SKILL, WOMEN AND YOUTH EMPLOYMENT, AFRICA GENDER POLICY, GENDER INNOVATION LAB,
Online Access:	http://documents.worldbank.org/curated/en/508611524745860721/Overcoming-information-asymmetry-in-job-search-the-power-of-a-reference-letter http://hdl.handle.net/10986/29744
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