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The labor market effects of employer recruitment choice

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  • DeVaro, Jed

Abstract

I analyze employer recruitment decisions using a dynamic, discrete-choice structural model that I estimate on a sample of clerical workers from the MCSUI, a large cross section of establishments in four metropolitan areas of the US. In the model, employers choose either informal recruitment methods (which generate a small but select applicant pool from which the employer can hire quickly) or formal methods (which create a large but less select applicant pool which the employer must screen intensively, delaying hiring times). I study the effects of three counterfactual simulations on recruitment strategies, starting wages, and vacancy durations: A wage subsidy, a policy designed to improve information about prospective matches, and an increase in the heterogeneity of prospective matches. I show that the effects of exogenous policy or environmental changes can be decomposed into "pure wage effects" that affect the wage offers employers post, holding constant their recruitment strategies, and "recruitment-wage effects" that involve changes in recruitment methods. The results show that changes in recruitment strategies represent an important channel through which changes in the economic environment affect the starting wages and vacancy duration for new hires.

Suggested Citation

  • DeVaro, Jed, 2008. "The labor market effects of employer recruitment choice," European Economic Review, Elsevier, vol. 52(2), pages 283-314, February.
  • Handle: RePEc:eee:eecrev:v:52:y:2008:i:2:p:283-314
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    References listed on IDEAS

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    1. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 869-891.
    2. Jed Devaro, 2005. "Employer Recruitment Strategies and the Labor Market Outcomes of New Hires," Economic Inquiry, Western Economic Association International, vol. 43(2), pages 263-282, April.
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    Cited by:

    1. Yannick Fondeur & Michèle Forté & Guillemette De Larquier & Sylvie Monchatre & Géraldine Rieucau & Marie Salognon & Ariel Sevilla & Carole Tuchszirer, 2012. "Pratiques de recrutement et sélectivité sur le marché du travail," Working Papers halshs-00971684, HAL.
    2. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
    3. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, Elsevier.
    4. Rebien, Martina & Stops, Michael & Zaharieva, Anna, 2017. "Formal search and referrals from a firm's perspective," Center for Mathematical Economics Working Papers 578, Center for Mathematical Economics, Bielefeld University.
    5. Pinoli, Sara, 2008. "Screening ex-ante or screening on-the-job? The impact of the employment contract," MPRA Paper 11429, University Library of Munich, Germany.
    6. Yannick Fondeur & Michèle Forté & Guillemette De Larquier & Sylvie Monchatre & Géraldine Rieucau & Marie Salognon & Ariel Sevilla & Carole Tuchszirer, 2012. "Pratiques de recrutement et sélectivité sur le marché du travail," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971684, HAL.
    7. Manant, Matthieu & Pajak, Serge & Soulié, Nicolas, 2014. "Do recruiters 'like' it? Online social networks and privacy in hiring: a pseudo-randomized experiment," MPRA Paper 56845, University Library of Munich, Germany.
    8. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    9. Pinoli, Sara, 2007. "Employment Protection and Labor Productivity: Positive or Negative?," MPRA Paper 11775, University Library of Munich, Germany.
    10. Chi Zhou & Wansheng Tang & Ruiqing Zhao, 2017. "An uncertain search model for recruitment problem with enterprise performance," Journal of Intelligent Manufacturing, Springer, vol. 28(3), pages 695-704, March.

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