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Employer screening costs, recruiting strategies, and labor market outcomes: An equilibrium analysis of on-campus recruiting

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  • Weinstein, Russell

Abstract

I analyze labor market matching with search and informational frictions, by studying employer recruiting on college campuses. Based on employer and university interviews, I develop a model describing firms’ choice of target campuses. The model predicts that with costly screening, firms concentrate (per student) at selective universities over those where high-quality students are larger in number, but smaller in proportion. Further, recruiting is affected by nearby universities’ selectivity. This prediction has strong support using data from 39 finance and consulting firms and the Baccalaureate and Beyond. For median-selectivity universities, a better regionally-ranked university is twice as likely to attract a consulting firm, and wages are higher by 4%. Halving screening costs, for example through algorithmic screening, structural estimation shows a 27% increase in the proportion of expected hires from universities outside the top selectivity quartile.

Suggested Citation

  • Weinstein, Russell, 2018. "Employer screening costs, recruiting strategies, and labor market outcomes: An equilibrium analysis of on-campus recruiting," Labour Economics, Elsevier, vol. 55(C), pages 282-299.
  • Handle: RePEc:eee:labeco:v:55:y:2018:i:c:p:282-299
    DOI: 10.1016/j.labeco.2018.10.007
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    Cited by:

    1. Weinstein, Russell, 2017. "University Selectivity, Initial Job Quality, and Longer-Run Salary," IZA Discussion Papers 10911, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Employer recruiting; Labor market search; Return to university education; Screening costs;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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