workseekers’ skills. We show that firms are willing to pay for access a database with information on workseekers’ skill assessment results and contact information. We also ask workseekers in our sample how much of a hypothetical job search subsidy they would be willing to spend on certification. They report 17%, compared to 24% on training and 27% on transport, suggesting the possibility of charging workseekers for assessment services. Some large firms already use in-house psychometric assessments in hiring (Autor and Scarborough, 2008; Hoffman et al., 2018). Anecdotally, psychometric assessments seem rarer in small firms, perhaps because in-house assessment systems are unlikely to be cost-effective when hires are infrequent. There are some third-party providers of assessment services around the world, including Harambee, LinkedIn, and the Manpower Group. Our results show that providing more information through certification can be valuable even in a labor market where some firms already use assessments, suggesting scope to grow this market. There are important market design questions around third-party provision that might be addressed in future work, such as which side(s) of the market will pay for assessment services, how third-party providers can establish reputations, how precisely or coarsely information should be reported, and under what conditions participants will opt into or out of assessment. This work might incorporate existing models of screening and signaling when both agents and principals have limited information (Alonso, 2018; Rosar and Schulte, 2012).

Our results also motivate future work on the interaction between different information provision mechanisms. For example, we find that public certification is most effective for workseekers with less work experience and without university education. This suggests that skill assessment and certification can substitute for alternative sources of information about workseekers’ skills. Future work could examine conditions under which skill assessment and certification are complements or substitutes for network referrals, reference letters, or outsourcing agencies.<sup>29</sup>

# **References**

- Abadie, A., S. Athey, G. Imbens, and J. Wooldridge (2017): “When Should You Adjust Standard Errors for Clustering?” Working Paper 24003, National Bureau of Economic Research.

- Abadie, A., M. Chingos, and M. West (2018): “Endogenous Stratification in Randomized Experiments,” _Review of Economics and Statistics_ , 100, 567–580.

- Abebe, G., S. Caria, M. Fafchamps, P. Falco, S. Franklin, and S. Quinn (2020a):

> 29 We find one result consistent with certification enhancing the effectiveness of referrals, potentially by helping network links to target referrals or making their referrals more credible to employers. Public certification slightly increases the probability of securing a job through a formal application or interview after a referral. There is no large or significant treatment effect on the probability of securing a job in other ways we measure: by approaching an employer in person, dropping off an application, emailing an application, getting hired by a social contact directly, or working at an employment broker. However, this result is only marginally statistically significant once we account for multiple testing across the different ways of finding a job. Hence, we view this as a suggestion for future work, rather than a core result.

32