Does Certification Increase Returns to Human Capital? Evidence from an Audit Study in India

Last registered on July 09, 2021

Pre-Trial

Trial Information

General Information

Title
Does Certification Increase Returns to Human Capital? Evidence from an Audit Study in India
RCT ID
AEARCTR-0007940
Initial registration date
July 08, 2021
Last updated
July 09, 2021, 12:47 PM EDT

Locations

There are documents in this trial unavailable to the public. Use the button below to request access to this information.

Request Information

Primary Investigator

Affiliation
UC Riverside

Other Primary Investigator(s)

PI Affiliation
CDDEP
PI Affiliation
UC Riverside

Additional Trial Information

Status
In development
Start date
2021-07-09
End date
2022-06-30
Secondary IDs
Abstract
India has experienced a fourfold increase in tertiary enrollment over two decades, which has coincided with high rates of unemployment for college graduates. In particular, it is difficult for students to convey information about their human capital to employers if they graduate from colleges that are perceived to be of low quality. As a result, standardized exit exams created by private companies have become widespread. Such certification tests can improve labor market outcomes by allowing potential employees, especially those who are recent graduates, to credibly indicate their level of competence. Using a correspondence/audit experiment, we study the following questions: (i) What is the value to recent graduates of certification (and college quality) as a signal in the labor market? (ii) How does the certification signal affect outcomes for job seekers depending on degree type, particularly for those with a low-quality degree? (iii) For what score levels is it optimal for job seekers to reveal their certification results to potential employers? (iv) Do firms interpret gender as a signal in this setting? Conditional on observing gender discrimination, can certification mitigate its impact?

As a companion to the audit study RCT, we also plan to conduct a short survey with a sample of hiring managers. This survey will allow us to understand how hiring managers view certification tests and, more generally, make decisions about who to hire.
External Link(s)

Registration Citation

Citation
Batheja, Deepshikha, Sarojini Hirshleifer and Opinder Kaur. 2021. "Does Certification Increase Returns to Human Capital? Evidence from an Audit Study in India ." AEA RCT Registry. July 09. https://doi.org/10.1257/rct.7940-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2021-07-09
Intervention End Date
2022-02-28

Primary Outcomes

Primary Outcomes (end points)
The outcome for the audit study will be the number of call-backs/response from employers in the form of interview invitations. Another outcome will be any response, including requests to send more information.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The RCT will be in the form of what is typically called a correspondence/audit study in which we will send applications/resumes from recent graduates in response to job postings by employers.
Experimental Design Details
Not available
Randomization Method
Randomization is conducted in STATA.
Randomization Unit
Resume-level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
This is not a cluster-randomized trial
Sample size: planned number of observations
18,000
Sample size (or number of clusters) by treatment arms
3,000 per treatment arm
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
This sample size will detect a 1.5-1.6 percentage point effect assuming a 4% mean response rate at 80% power. This effect size is conservative for the literature, but is seen in Carranza et al. (2020) and Zhou et al. (2013). The base-rate of 4% is appropriate for India as in Banerjee et al. (2009) at 80%. We plan to send 12 resumes to each employer, balanced across certification scores (high/low) and college quality (Tier-2/Tier-3 college-type) as well gender (male/female). Therefore, in order to send 18,000 resumes, we will have to apply to 1500 jobs.
IRB

Institutional Review Boards (IRBs)

IRB Name
UC Riverside Socio-Behavioral
IRB Approval Date
2020-12-11
IRB Approval Number
HS-20-251