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Screening ex-ante or screening on-the-job? The impact of the employment contract

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Author Info
Pinoli, Sara

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Abstract

This paper studies how employers collect information about the quality of workers. Two are the strategies: screening ex-ante, through the recruitment process, and monitoring new hires at work, or screening on-the-job. Using two datasets representative of workers in Great Britain, we provide empirical evidence that the optimal choice is related to the type of employment contract offered by the .rm. Our estimates show that temporary workers are associated with lower recruitment effort - in terms of lower cost and higher speed - and closer monitoring than permanent employees. But this relation depends crucially on the type of jobs. Differences in screening effort are substantial for low-level occupations, while the gap is marginal or not significant for high-skilled jobs.

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File URL: http://mpra.ub.uni-muenchen.de/11429/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11429.

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Date of creation: 06 Jan 2008
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Handle: RePEc:pra:mprapa:11429

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Related research
Keywords: Fixed-term contracts; Recruitment; Monitoring;

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Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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References listed on IDEAS
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  1. Katharine G. Abraham, 1988. "Flexible Staffing Arrangements and Employers' Short-Term Adjustment Strategies," NBER Working Papers 2617, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Peter Cappelli & Peter D. Sherer, 1990. "Assessing worker attitudes under a two-tier wage plan," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(2), pages 225-244, January.
  3. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July. [Downloadable!] (restricted)
    Other versions:
  4. Barron, John M & Bishop, John, 1985. "Extensive Search, Intensive Search, and Hiring Costs: New Evidence on Employer Hiring Activity," Economic Inquiry, Oxford University Press, vol. 23(3), pages 363-82, July.
  5. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October. [Downloadable!] (restricted)
    Other versions:
  6. Jed DeVaro, 2005. "The Labor Market Effects of Employer Recruitment Choice," Labor and Demography 0508006, EconWPA. [Downloadable!]
  7. Susan N. Houseman, 2001. "Why employers use flexible staffing arrangements: Evidence from an establishment survey," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 149-170, October.
  8. Hosios, Arthur J & Peters, Michael, 1993. "Self-selection and Monitoring in Dynamic Incentive Problems with Incomplete Contracts," Review of Economic Studies, Blackwell Publishing, vol. 60(1), pages 149-74, January. [Downloadable!] (restricted)
  9. Ichino, Andrea & Muehlheusser, Gerd, 2008. "How often should you open the door?: Optimal monitoring to screen heterogeneous agents," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 820-831, September. [Downloadable!] (restricted)
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  10. Michele Pellizzari, 2005. "Employers' Search and the Efficiency of Matching," IZA Discussion Papers 1862, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Kramarz, Francis & Michaud, Marie-Laure, 2004. "The Shape of Hiring and Separation Costs," IZA Discussion Papers 1170, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Bac, Mehmet, 2000. "On-the-Job Specific Training and Efficient Screening," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 681-701, October. [Downloadable!] (restricted)
  13. Abowd, John M. & Kramarz, Francis, 2003. "The costs of hiring and separations," Labour Economics, Elsevier, vol. 10(5), pages 499-530, October. [Downloadable!] (restricted)
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  14. Goux, Dominique & Maurin, Eric & Pauchet, Marianne, 2001. "Fixed-term contracts and the dynamics of labour demand," European Economic Review, Elsevier, vol. 45(3), pages 533-552, March. [Downloadable!] (restricted)
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  15. César Alonso-Borrego & Jesús Fernández-Villaverde & José E. Galdón-Sánchez, 2005. "Evaluating Labor Market Reforms: A General Equilibrium Approach," NBER Working Papers 11519, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Jed Devaro, 2005. "Employer Recruitment Strategies and the Labor Market Outcomes of New Hires," Economic Inquiry, Oxford University Press, vol. 43(2), pages 263-282, April. [Downloadable!] (restricted)
  17. Wasmer, Etienne, 1999. "Competition for Jobs in a Growing Economy and the Emergence of Dualism," Economic Journal, Royal Economic Society, vol. 109(457), pages 349-71, July. [Downloadable!] (restricted)
    Other versions:
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