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The Establishment-Level Behavior of Vacancies and Hiring

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  • Steven J. Davis
  • R. Jason Faberman
  • John C. Haltiwanger

Abstract

This paper is the first to study vacancies, hires, and vacancy yields at the establishment level in the Job Openings and Labor Turnover Survey, a large sample of US employers. To interpret the data, we develop a simple model that identifies the flow of new vacancies and the job-filling rate for vacant positions. The fill rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section. It falls with employer size, rises with worker turnover rates, and varies by a factor of four across major industry groups. We also develop evidence that the employer-level hiring technology exhibits mild increasing returns in vacancies, and that employers rely heavily on other instruments, in addition to vacancies, as they vary hires. Building from our evidence and a generalized matching function, we construct a new index of recruiting intensity (per vacancy). Recruiting intensity partly explains the recent breakdown in the standard matching function, delivers a better-fitting empirical Beveridge curve, and accounts for a large share of fluctuations in aggregate hires. Our evidence and analysis provide useful inputs for assessing, developing, and calibrating theoretical models of search, matching, and hiring in the labor market. JEL Codes: D21, E24, J60. Copyright 2013, Oxford University Press.

Suggested Citation

  • Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 581-622.
  • Handle: RePEc:oup:qjecon:v:128:y:2013:i:2:p:581-622
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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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