Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations
Avoiding labor shortages for skilled employees is one of the major challenges for highly competitive firms acting in tight labor markets. The ability to avoid labor shortages on the company level, for example measured by the share of vacant jobs, is distributed very unevenly and cannot in general be explained by differences in wages and compensation packages as standard economic theory would suggest. In our paper we present a theoretical explanation for large and persisting inter-firm differences in job vacancy rates. Many psychological studies show that unobservable job and company characteristics such as work atmosphere or individual self determination are crucial for employees’ job choices. However, since these characteristics are not reliably observable to an outsider, we argue that potential employees use other, on the surface nonessential company characteristics as signals for their preferred characteristics in their job decision. To derive empirically testable hypotheses we reverse Spence’s labor market signaling model and study how employers can reliably signal the quality of their work climate and labor relations to potential employees. We use a rich data set from approximately 700 firms to test our hypotheses and do find in fact that formal features of labor relations which on the surface may not seem relevant for recruitment success of skilled workers nevertheless exert significant effects on recruitment success and job vacancies.
|Date of creation:||Jan 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Plattenstrasse 14, CH-8032 Zürich|
Phone: ++41 1 634 29 27
Fax: ++41 1 634 43 48
Web page: http://www.isu.uzh.ch
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
- J. A. Hausman, 1976.
"Specification Tests in Econometrics,"
185, Massachusetts Institute of Technology (MIT), Department of Economics.
- Mari Sako & Gregory Jackson, 2006. "Strategy Meets Institutions: The Transformation of Management-Labor Relations at Deutsche Telekom and Ntt," ILR Review, Cornell University, ILR School, vol. 59(3), pages 347-366, April.
- KÉSENNE, Stefan, .
"The impact of salary caps in professional team sports,"
1999026, University of Antwerp, Faculty of Applied Economics.
- Kesenne, Stefan, 2000. "The Impact of Salary Caps in Professional Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 422-30, September.
- Holzer, Harry J, 1994.
"Job Vacancy Rates in the Firm: An Empirical Analysis,"
London School of Economics and Political Science, vol. 61(241), pages 17-36, February.
- Harry J. Holzer, 1990. "Job Vacancy Rates in the Firm: An Empirical Analysis," NBER Working Papers 3524, National Bureau of Economic Research, Inc.
- Sonia Falconieri & Frédéric Palomino & József Sákovics, 2004. "Collective Versus Individual Sale of Television Rights in League Sports," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 833-862, 09.
- Lutz Bellmann & Uwe Blien, 2001. "Wage Curve Analyses of Establishment Data from Western Germany," ILR Review, Cornell University, ILR School, vol. 54(4), pages 851-863, July.
- Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-46, June.
- Whitney, James D, 1993. "Bidding Till Bankrupt: Destructive Competition in Professional Team Sports," Economic Inquiry, Western Economic Association International, vol. 31(1), pages 100-115, January.
- Wagner, Joachim & Schnabel, Claus & Schank, Thorsten & Addison, John T., 2005.
"Do Works Councils Inhibit Investment?,"
32, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Alberto Bayo-Moriones & Pedro OrtÃn-Ã ngel, 2006. "Internal Promotion versus External Recruitment in Industrial Plants in Spain," ILR Review, Cornell University, ILR School, vol. 59(3), pages 451-470, April.
- Stefan Kesenne, 2000.
"Revenue Sharing and Competitive Balance in Professional Team Sports,"
Journal of Sports Economics,
, vol. 1(1), pages 56-65, February.
- KÉSENNE, Stefan, . "Revenue sharing and competitive balance in professional team sports," Working Papers 1999019, University of Antwerp, Faculty of Applied Economics.
- Vrooman, John, 2000. "The Economics of American Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 364-98, September.
- KÉSENNE, Stefan, . "The salary cap proposal of the G-14 in European football," Working Papers 2003018, University of Antwerp, Faculty of Applied Economics.
- John S. Heywood & Uwe Jirjahn, 2002. "Payment Schemes and Gender in Germany," ILR Review, Cornell University, ILR School, vol. 56(1), pages 44-64, October.
- Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
- Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
- Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
When requesting a correction, please mention this item's handle: RePEc:iso:wpaper:0067. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IBW IT)
If references are entirely missing, you can add them using this form.