Migrants workers and employers rely on intermediaries to facilitate labor market placements. If information frictions obscure their reputation, however, intermediaries may under-invest in placement quality. Using data on over 1.5 million Sri Lankan migrants to the Gulf region, we examine the effects of an intermediary rating program that publicly revealed ratings two years after it was announced. Prior to the ratings being revealed, eligible under-performing agencies invest in the rating criteria and place migrants with less abusive employers who pay higher salaries. Our results suggest that the threat of quality revelation induced agencies to prospectively screen employers.
Working Paper
Regulation by Reputation? Intermediaries, Labor Abuses, and International Migration
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