A Low-Cost Signal: Evidence on Skill Certification and Migrant Labor Market Integration

Labor markets in low- and middle-income countries face significant information frictions that weaken job matching. These frictions are particularly acute for migrants because employers often lack reliable signals of their skills, receive no references that help verify experience, and struggle to interpret foreign education credentials. Competency-based skill certification offers a direct way to address these barriers by providing verifiable information on workers’ abilities and encouraging firms to consider candidates they might otherwise overlook. We study Talentos que Impulsan (TQI), a certification program implemented with Colombia’s National Learning Service (SENA) that assesses and validates workers’ skills. Participation in the program is randomly assigned, allocating slots to migrants and locals across five major cities. Leveraging this design, we estimate certification's effects on labor market outcomes and mental well-being. Because this intervention reduces per-participant costs by more than half relative to incentive-based certification models in the same context, it provides a unique opportunity to evaluate a highly scalable alternative. The absence of financial incentives further enables us to isolate the returns to pure signaling, separate from impacts driven by monetary support. Our findings will contribute evidence on the role of low-cost certification in improving labor-market signaling, advancing migrant labor-market integration, and informing the design of scalable employment policies in resource-constrained settings.