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Recruitment of Seemingly Overeducated Personnel: Insider-Outsider Effects on Fair Employee Selection Practices

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Author Info
Fabel, Oliver
Pascalau, Razvan

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Abstract

We analyze a standard employee selection model given two institutional constraints: First, professional experience perfectly substitutes insufficient formal education for insiders while this substitution is imperfect for outsiders. Second, in the latter case the respective substitution rate increases with the advertised minimum educational requirement. Optimal selection implies that the expected level of formal education is higher for outsider than for insider recruits. Moreover, this difference in educational attainments increases with lower optimal minimum educational job requirements. Investigating data of a large US public employer confirms both of the above theoretical implications. Generally, the econometric model exhibits a “good fit”.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7218.

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Date of creation: 24 Oct 2007
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Handle: RePEc:pra:mprapa:7218

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Related research
Keywords: employee selection; overeducation; adverse impact; insiders vs outsiders;

Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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