The Value of Reference Letters: Experimental Evidence from South Africa
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Martin Abel
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Rulof Burger
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Patrizio Piraino
- American Economic Journal: Applied Economics (Forthcoming)
Abstract
We show that reference letters from former employers alleviate
information frictions in a low-skill labor market, improving applicant
screening and gender equity. A resume audit study finds that
using a reference letter in the application increases callbacks by
60%. Women drive the effect. 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, reference letters raise job
interviews and employment for women.
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