The Value of Non-Traditional Credentials in the Labor Market

Susan Athey and Emil Palikot

Papers from arXiv.org

Abstract: Workers without formal credentials experience substantially lower employment rates than their credentialed counterparts, but the extent to which information frictions contribute to these disparities remains unclear. We conducted a randomized experiment with over 800,000 online certificate earners from developing countries who lack college degrees, encouraging credential sharing on LinkedIn through reduced friction and reminders. We study credential visibility for the full sample and track employment outcomes for 40,000 learners. The intervention increased new employment by 6% (1.0 percentage point), with larger effects of 9% (1.2 percentage points) for jobs related to certificates. Treatment effects concentrate among learners with weak baseline employability: those in the bottom tercile experience employment gains of 12% while those in the top tercile see negligible effects. Those most responsive to the intervention benefit most from sharing, with a local average treatment effect of 11 percentage points for compliers. Counterfactual resume scoring shows that credentials improve perceived candidate quality by 8.5 points on average (on a scale from 1 to 100), with effects of 15-20 points for weak resumes but near-zero for strong resumes. Our findings demonstrate that information frictions substantially constrain employment for workers without traditional credentials, and that minimal-cost interventions targeting credential visibility can generate employment gains comparable to intensive training programs.

Date: 2024-04, Revised 2025-11
New Economics Papers: this item is included in nep-exp and nep-inv
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http://arxiv.org/pdf/2405.00247 Latest version (application/pdf)

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Working Paper: The Value of Non-traditional Credentials in the Labor Market (2024)
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