Association for Public Policy Analysis & Management

Abuse and contractual breach are persistent features of international migrant labor. This may in part be due to opaque supply chains, multiple intermediaries and a paucity of information for would be migrants. This paper investigates the role of a government program intended to address such asymmetries by creating reputational incentives for local labor intermediaries and publicly revealing their service quality. We matched over 2 million migrant records to foreign intermediaries, local recruitment agencies, and labor complaints registered at over 70 Sri Lankan consulates in the last decade. Using a difference-in-difference design with an eligibility cutoff, we find that agencies which receive a ‘good’ rating are substantially less likely to exit the market and see their revenues double. In contrast, ‘bad’ agencies are more likely to exit and see a dramatic reduction in revenue. Good agencies are able to win higher quality foreign contracts and recruit more vulnerable worker types. High complaint rate agencies that receive a ‘good’ rating appear to differentially benefit. However, we find limited evidence to suggest that the program improved the match quality of migrants.