Regulation by Reputation? Quality Revelation of Labor Intermediaries in International Migration

Abuse and contractual breach are commonplace features of international migrant labor. This may in part be due to asymmetries of information between local labor intermediaries, prospective migrants and foreign employers. This paper examines a government program in Sri Lanka that created reputational incentives for local labor intermediaries and then publicly revealed their quality. Using a difference-in-difference design with an eligibility cutoff, we find that the program announcement induced all eligible agencies, and especially low-quality ones, to invest in the rating criteria.

• labor
• migration