The value of reference letters

Stellenbosch Working Paper Series No. WP06/2017
 
Publication date: June 2017
 
Author(s):
[protected email address] (Faculty of Arts and Sciences, Harvard University)
[protected email address] (Department of Economics, Stellenbosch University)
[protected email address] (School of Economics, University of Cape Town)
 
Abstract:

We show that reference letters from former employers alleviate information asymmetries about workers’ skills and improve both match quality and equity in the labor market. A resume audit study finds that using a reference letter in the application increases callbacks by 61%. Women disproportionately benefit. Letters are effective because they provide valuable information about workers’ skills that employers use to select applicants of higher ability. A second experiment, which encourages job seekers to obtain and use a reference letter, finds consistent results. In particular, employment rates for women who obtain letters double, fully closing the gender gap in our sample.

 
JEL Classification:

D83, J24, M51

Keywords:

Unemployment, references, South Africa, active labor market policies

Download: PDF (2.6 MB)

Login

(for staff & registered students)



Need a password?
Forgot your password?

BER Weekly

18 February 2019
There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground last week on the back of a strong US dollar and the return of load shedding. On the international...

Read the full issue
 

BER Weekly

18 February 2019
There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground last week on the back of a strong US dollar and the return of load shedding. On the international...

Read the full issue