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What Makes Hiring Difficult? Evidence from Linked Survey-Administrative Data

Author

Listed:
  • Bertheau, Antoine

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Larsen, Birthe

    (Copenhagen Business School)

  • Zhao, Zeyu

    (University of Copenhagen)

Abstract

We designed an innovative survey of firms and linked it to Danish administrative data to yield new insights about the factors that can influence firms’ hiring decisions. Several important findings stand out: (1) search and training frictions and economic uncertainty are as important as labor costs in hiring decisions ; (2) search and training frictions are more likely to affect younger and smaller firms; (3) uncertainty is more likely to affect hiring decisions in low-productivity firms; (4) thirty percent of firms prefer to hire already employed persons over the unemployed, because they believe that unemployed workers have lower abilities due to negative selection or skill depreciation during unemployment; and (5) these firms are more likely to report that labor market frictions and labor costs considerations discourage them from hiring.

Suggested Citation

  • Bertheau, Antoine & Larsen, Birthe & Zhao, Zeyu, 2023. "What Makes Hiring Difficult? Evidence from Linked Survey-Administrative Data," Discussion Paper Series in Economics 20/2023, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2023_020
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    Cited by:

    1. Bertheau, Antoine & Kudlyak, Marianna & Larsen, Birthe & Bennedsen, Morten, 2025. "Why Firms Lay Off Workers Instead of Cutting Wages: Evidence From Linked Survey-Administrative Data," Discussion Paper Series in Economics 4/2025, Norwegian School of Economics, Department of Economics.
    2. Gozde Corekcioglu & Marco Francesconi & Astrid Kunze, 2025. "Parental Leave from the Firm’s Perspective," CESifo Working Paper Series 11868, CESifo.
    3. Carolin Linckh & Samuel Muehlemann & Harald Pfeifer, 2024. "Beggars cannot be choosers: Labor market tightness and hiring standards, wages, and hiring costs," Economics of Education Working Paper Series 0217, University of Zurich, Department of Business Administration (IBW).
    4. Shisham Adhikari & Athanasios Geromichalos & Ates Gursoy & Ioannis Kospentaris, 2025. "How much work experience do you need to get your first job?: The macroeconomic implications of bias against labor market entrants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 58, October.

    More about this item

    Keywords

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    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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