Online markets for remote labour services allow workers and firms to contract with each other directly. Despite this, intermediaries-called outsourcing agencies-have emerged in these markets. This article shows that agencies signal to employers that inexperienced workers are high quality. Workers affiliated with an agency have substantially higher job-finding probabilities and wages at the beginning of their careers compared to similar workers without an agency affiliation. This advantage declines after highquality non-affiliated workers receive good public feedback scores. The results indicate that intermediaries have arisen endogenously to permit a more efficient allocation of workers to jobs. ? The Author 2015.

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1 April 2016

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The Review of Economic Studies 83(2) , pp.810-854, 2016

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DOI: 10.1093/restud/rdv042

https://academic.oup.com/restud/article-abstract/83/2/810/2461196?redirectedFrom=fulltext

This Journal article is published under the centre's Trade programme.