Description:

Speaker: Daniela Borja Arriaga

Title: Amenities as Signals of Employer Quality: Evidence from Domestic Workers in Mexico

Abstract: Domestic workers often accept jobs with limited formal protections and uncertain working conditions. In such environments, workers rely on signals—such as referrals, or the offer of formal benefits—to infer employer quality. This presentation examines whether contractible amenities, like Social Security coverage, serve as signals of unobservable attributes such as respect, safety, or fairness. I study (i) workers' willingness to pay (WTP) for signals of unobserved employer quality, (ii) whether contractible amenities themselves act as such signals, and (iii) how to separate the intrinsic value of amenities (e.g., actual healthcare coverage) from their signaling value (what offering coverage reveals about the employer). I aim to show how information frictions shape workers’ job choices and to illustrate the policy trade-offs that arise when formal benefits also act as signals of employer quality.