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Skills, Signals, and Employability: An Experimental Investigation

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  • Piopiunik, Marc

    (ifo Institute at the University of Munich)

  • Schwerdt, Guido

    (University of Konstanz)

  • Simon, Lisa

    (ifo Institute at the University of Munich)

  • Woessmann, Ludger

    (ifo and LMU Munich)

Abstract

As skills of labor-market entrants are usually not directly observed by employers, individuals acquire skill signals. To study which signals are valued by employers, we simultaneously and independently randomize a broad range of skill signals on pairs of resumes of fictitious applicants among which we ask a large representative sample of German human-resource managers to choose. We find that signals in all three studied domains - cognitive skills, social skills, and maturity - have a significant effect on being invited for a job interview. Consistent with the relevance, expectedness, and credibility of different signals, the specific signal that is effective in each domain differs between apprenticeship applicants and college graduates. While GPAs and social skills are significant for both genders, males are particularly rewarded for maturity and females for IT and language skills. Older HR managers value school grades less and other signals more, whereas HR managers in larger firms value college grades more.

Suggested Citation

  • Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2018. "Skills, Signals, and Employability: An Experimental Investigation," Rationality and Competition Discussion Paper Series 63, CRC TRR 190 Rationality and Competition.
  • Handle: RePEc:rco:dpaper:63
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    4. Wehner, Caroline & de Grip, Andries & Pfeifer, Harald, 2020. "Do recruiters select workers with different personality traits for different tasks? A discrete choice experiment," Research Memorandum 035, Maastricht University, Graduate School of Business and Economics (GSBE).
    5. Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2020. "Skills, signals, and employability: An experimental investigation," European Economic Review, Elsevier, vol. 123(C).
    6. Sterkens, Philippe & Baert, Stijn & Rooman, Claudia & Derous, Eva, 2021. "Why Making Promotion After a Burnout Is Like Boiling the Ocean," GLO Discussion Paper Series 871, Global Labor Organization (GLO).
    7. Ludger Wößmann, 2020. "Folgekosten ausbleibenden Lernens: Was wir über die Corona-bedingten Schulschließungen aus der Forschung lernen können," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(06), pages 38-44, June.
    8. Nas Ozen,Selin Efsan & Hut,Stefan & Levin,Victoria & Munoz Boudet,Ana Maria, 2020. "A Field Experiment on the Role of Socioemotional Skills and Gender for Hiring in Turkey," Policy Research Working Paper Series 9154, The World Bank.
    9. Georg Graetz, 2021. "On the interpretation of diploma wage effects estimated by regression discontinuity designs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 228-258, February.
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    More about this item

    Keywords

    signals; cognitive skills; social skills; resume; hiring; labor market;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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