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Do Microcredentials Help New Workers Enter the Market? Evidence from an Online Labor Platform

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  • Otto Kässi
  • Vili Lehdonvirta

Abstract

We investigate the effects of a voluntary microcredentialing scheme on an online freelancing labor market. Drawing on transaction†level data, we show that obtaining a microcredential increases workers’ earnings. This effect is not driven by increased worker productivity but by decreased employer uncertainty. The increase in worker earnings is realized through an increase in the value of the projects won rather than an increase in the number of projects. We also find that the effect of microcredentials is lower for more experienced workers, which suggests that signaling by microcredentials and other forms of verified information are partial substitutes.

Suggested Citation

  • Otto Kässi & Vili Lehdonvirta, 2024. "Do Microcredentials Help New Workers Enter the Market? Evidence from an Online Labor Platform," Journal of Human Resources, University of Wisconsin Press, vol. 59(4), pages 1284-1318.
    • Handle: RePEc:uwp:jhriss:v:59:y:2024:i:4:p:1284-1318
    Note: DOI: https://doi.org/10.3368/jhr.0519-10226R3
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    References listed on IDEAS

    as
    1. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    3. John J. Horton, 2017. "The Effects of Algorithmic Labor Market Recommendations: Evidence from a Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 35(2), pages 345-385.
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I2 - Health, Education, and Welfare - - Education

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