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Increasing Employment Through the Partial Release of Information

Author

Listed:
  • Surajeet Chakravarty

    (Department of Economics, University of Exeter)

  • Todd R. Kaplan

    (Department of Economics, University of Exeter)

  • Luke Lindsay

    (Department of Economics, University of Exeter)

Abstract

We investigate whether an agency can increase employment by strategically coarsening information about workers' skills and abilities to employers. Theoretically, we find that such an increase is possible and a range of employment levels can be supported in equilibrium. We test this possibility using laboratory experiments under three conditions: full information, coarse and verifiable information, and coarse but not verifiable information. We find that, compared with full information, both treatments with coarse information increase employment at the expense of the employers' profits but not the highest theoretically achievable levels. We also find verifiability affects several aspects of behavior.

Suggested Citation

  • Surajeet Chakravarty & Todd R. Kaplan & Luke Lindsay, 2020. "Increasing Employment Through the Partial Release of Information," Discussion Papers 2001, University of Exeter, Department of Economics, revised 2023.
    • Handle: RePEc:exe:wpaper:2001
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    References listed on IDEAS

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    More about this item

    Keywords

    job placements; ratings; lab experiments; institutions; information design; unemployment;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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