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The value of reference letters

Martin Abel (), Rulof Burger () and Patrizio Piraino ()

No 06/2017, Working Papers from Stellenbosch University, Department of Economics

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.

Keywords: Unemployment; references; South Africa; active labor market policies (search for similar items in EconPapers)
JEL-codes: D83 J24 M51 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-hrm and nep-lma
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Working Paper: The value of reference letters (2017) Downloads
Working Paper: The value of reference letters (2017) Downloads
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