Do digital skill certificates help new workers enter the market? Evidence from an online labour platform
This paper studies the effects of a voluntary skill certification scheme in an online freelancing labour market. The paper show that obtaining skill certificates increases a worker’s earnings. This effect is not driven by increased worker productivity but by decreased employer uncertainty. The increase in worker earnings is mostly realised through an increase in the value of the projects obtained (up to 10%) rather than an increase in the number of projects obtained (up to 0.03 projects). In addition, the paper finds evidence for negative selection to completing skill certificates, which suggests that the workers who complete more skill certificates are, on average, in a more disadvantaged position in the labour market. Finally, skill certificates are found to be an imperfect substitute to other types of standardised information. On the whole, the results suggest that certificates play a role in helping new workers break into the labour market, but are more valuable to workers with at least some work experience. More stringent skill certification tests could improve the benefits to new workers.