The goal of our work is to understand the constraints that firms in the developing world face when hiring workers, particularly those with relatively little experience in the labor market. These frictions not only lead to diminished productivity for firms, but can also result in bad outcomes for workers. This project uses a randomized experiment to determine the importance of labor market frictions in India, as well as the extent to which online marketplaces providing skills assessments can reduce these constraints. To carry out the evaluation, researchers are partnering with Aspiring Minds, a firm providing a range of skill assessments for different job roles, which can be used to rapidly screen candidates. The trial involves providing these assessments to 3 companies throughout India, with randomly selected job postings assigned to the treatment group. Those in this group are asked to take a skill assessment that will be shared with recruiters and hiring managers. The findings from this research will contribute to the limited empirical research investigating how labor market frictions affect firm productivity in developing countries, shedding light on cost-effective interventions to overcome these frictions. Results forthcoming.
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