Understanding how employers screen recent graduates in India is important because the rapid expansion of tertiary education has created substantial variation in college quality and graduate skills. Identifying which signals employers use can reveal labour-market information frictions, and inform policies designed to improve hiring efficiency and employment outcomes.

Interesting new research by Deepshikha Batheja, Sarojini Hirshleifer, and Opinder Kaur brings an experimental perspective to bear on the above question. These researchers examine whether employers use information about applicants’ college quality and post-college certification to screen recent graduates in India. This research addresses a central problem in labour markets: employers often have limited information about jobseekers’ skills, while applicants use educational credentials and other qualifications to signal their human capital. This issue is important in India, where the number of tertiary institutions has expanded dramatically, producing substantial variation in college quality. At the same time, many graduates take standardised employability examinations intended to provide employers with additional information about their skills.

The researchers focus on recent engineering graduates applying for entry-level information technology and related positions. Their principal research questions are whether employers respond differently to applicants graduating from higher- versus lower-quality colleges, whether certification scores influence employers’ responses, and whether certification can compensate for graduating from a lower-quality institution. The research also investigates gender differences in early-stage hiring. This research is particularly relevant because applicants have little work experience with which employers can assess their abilities, making educational credentials potentially salient signals of productivity.

To answer these questions, the researchers conducted a large-scale correspondence experiment. Between July 2021 and January 2022, they submitted 16,944 resumes to 1,412 job vacancies in eight Indian cities. The research concentrated on small and medium-sized firms and sought to capture a near-universe of relevant vacancies advertised on major online employment platforms during the study period. The researchers constructed realistic resumes for engineering graduates with no prior work experience apart from internships. The resumes were experimentally varied along three dimensions: college quality, certification scores, and applicant gender. Each employer received twelve resumes representing different combinations of these characteristics.

The first treatment concerned college quality. The researchers compared graduates of tier-2 colleges—institutions ranked between 200 and 300 under India’s National Institutional Ranking Framework—with graduates of tier-3 institutions outside the top 1,000. They deliberately excluded elite tier-1 colleges because the study was intended to examine the labour-market prospects of most graduates attending non-elite institutions. The second treatment concerned a widely used employability certification examination measuring English comprehension, logical reasoning, quantitative ability, and job-relevant technical skills. Resumes either omitted certification information or reported scores drawn from the highest or lowest quartiles of the relevant distributions.

The Findings
The central finding was that neither college quality nor certification had a meaningful impact on callback rates. The estimated effect of graduating from a tier-3 rather than a tier-2 college was only −0.22 percentage points, with a standard error of 0.16 percentage points. Similarly, including a certification score produced an estimated effect of −0.11 percentage points, with a narrow confidence interval ranging from −0.44 to 0.22 percentage points. Separate analyses of high- and low-certification scores also yielded statistically insignificant effects.

This research also found little evidence that certification compensated for lower college quality. A high certification score did not significantly improve the callback prospects of applicants from tier-3 colleges. There was, however, a modest negative interaction between attending a low-quality college and having a low certification score. This suggested that negative signals may matter more than positive signals in the hiring process.

The gender results provided a second important finding. Resumes with female names received callbacks at a rate 0.36 percentage points higher than otherwise comparable resumes with male names. This effect is statistically significant and varies across regions, although the authors emphasised that the finding concerned only the initial stage of hiring and therefore could not establish the absence of gender discrimination at later stages. The experiment found no meaningful interaction between gender and either college quality or certification.

To explain the surprising lack of effect for the two human-capital signals, the researchers surveyed more than 250 hiring managers. The survey suggested that employers were often aware of college rankings and certifications, but did not consistently use them during initial resume screening. Only a minority used the specific ranking system employed in the experiment, while many relied on personal knowledge or alternative methods for assessing college quality. Similarly, relatively few firms used the study’s certification during resume screening. These patterns suggest that awareness of a potentially useful signal does not necessarily translate into effective adoption.

In sum, this research showed that government investments in educational rankings and large-scale certification systems do not automatically ensure that employers will use these signals effectively. The findings point toward potential interventions aimed at improving firms’ hiring practices, including providing more specific guidance, using skilled human-resource consultants, and aligning managers’ incentives with firms’ broader interests. These findings contribute to the literature on education, labour-market information frictions, and hiring in developing economies by demonstrating that the existence of information about human capital is not sufficient to ensure that employers actually incorporate this information into hiring decisions.