Employers' recruitment behaviour and vacancy duration: an empirical analysis for the Dutch labour market

The functioning of labour markets from a demand-side perspective is examined. In particular, the determinants of vacancy duration are studied in the context of a model of employers' search behaviour. A model for the choice of the recruitment strategy at the start of the search process and the corresponding recruitment duration is developed in which allowance is made for different patterns of duration dependence for each recruitment strategy. This model is applied to data on employers' search behaviour in the Dutch labour market. It is found that employers prefer advertisements as the first recruitment channel when applicants are required to have work experience. Moreover, employers prefer to start searching via the labour exchange office when jobs in the secondary segment of the labour market have to be filled. It is also found that - when advertisements are used as the first recruitment strategy - employers need some time to acquire a pool of applicants and to select candidates from this pool. It is interesting as a contrast that applicants seem to be evaluated rather quickly if employers start searching via informal contacts.     

Using Employer Hiring Behavior to Test the Educational Signaling Hypothesis*

This paper presents a test of the educational signaling hypothesis. If employers use education as a signal in the hiring process, they will rely more on education when less is otherwise known about applicants. We find that employers are more likely to lower educational standards when an informal, more informative recruitment channel is used. We thus reject the hypothesis that education is not used as a signal in the hiring process.     

FORMAL SEARCH AND REFERRALS FROM A FIRM'S PERSPECTIVE

We explore the relationship between firms' characteristics and recruitment strategies. We present a theoretical search model with two search channels: a costly formal channel and a costless informal channel (referrals). We empirically test the model predictions and find that: larger firms search more formally; firms search more formally for high-skilled workers; the positive relationship between firm's size and formal search intensity also holds for firms not using referrals; firms using referrals invest less into formal search compared to firms not using referrals; larger firms hire less often by referrals than smaller firms; and larger search effort leads to more applicants.     

Recruitment channel use and applicant arrival: An empirical analysis

This paper focuses on the recruitment behaviour of firms at the extensive margin; we empirically explore the relationship between employer search strategies and the number of applicants by means of (reduced form) two-equations simultaneous models. The empirical analysis is carried out on a rich micro data set on Dutch employer recruitment behaviour. Our empirical analysis reveals that the economic conditions prevailing on the labour market influence employer search activity at the extensive margin. In particular, we see that in tight (slack) labour markets characterised by excess demand (supply) of labour, the flow of applicants is smaller (larger). Employers react to the shortage (excess) of applicants by using more (less) often advertisements. This recruitment channel appears to trigger a significantly larger flow of applicants. First version received: December 1997/Final version received: June 2000     

The labor market effects of employer recruitment choice

I analyze employer recruitment decisions using a dynamic, discrete-choice structural model that I estimate on a sample of clerical workers from the MCSUI, a large cross section of establishments in four metropolitan areas of the US. In the model, employers choose either informal recruitment methods (which generate a small but select applicant pool from which the employer can hire quickly) or formal methods (which create a large but less select applicant pool which the employer must screen intensively, delaying hiring times). I study the effects of three counterfactual simulations on recruitment strategies, starting wages, and vacancy durations: A wage subsidy, a policy designed to improve information about prospective matches, and an increase in the heterogeneity of prospective matches. I show that the effects of exogenous policy or environmental changes can be decomposed into “pure wage effects” that affect the wage offers employers post, holding constant their recruitment strategies, and “recruitment-wage effects” that involve changes in recruitment methods. The results show that changes in recruitment strategies represent an important channel through which changes in the economic environment affect the starting wages and vacancy duration for new hires.     

Filling vacancies: an empirical analysis of the cost and benefit of search in the labour market

This paper investigates empirically the factors that affect the cost–benefit ratio of employers’ search. The empirical analysis is based on a small Dutch data set containing individual information on filled vacancies. It is found that firms that use advertisements during recruitment are sensitive to labour market conditions; their search cost per applicant rises (drops) in tight (slack) labour markets because of the diminished ability of advertisements to generate applicants in tight labour markets. Furthermore, it is found that the high search cost incurred by posting identical vacancies is more than compensated for by the benefits from having a larger flow of applicants.     

The impact of employers' recruitment behaviour on the allocation of vacant jobs to unemployed job seekers

This paper is focused on the allocation of vacant jobs to job seekers from a demand side perspective by studying the recruitment behaviour of employers. A model is developed to analyze the role of search and selection methods of employers as determinants of the probability that an unemployed person will be hired for a certain type of job. In an empirical application for the Dutch labour market, we have examined the effect of employer's recruitment behaviour on the allocation of vacant jobs to employed, unemployed and school-leaving job seekers.We find that job requirements for the applicants with respect to work experience are the most important determinant of the probability that an unemployed person will be selected to fill a vacant job. In addition, the use of advertisements by employers for jobs requiring high skill levels does also have a significant effect.     

Vacancy durations - a model for employer's search

This paper investigates a Dutch data set on vacancy durations and numbers of applicants to enquire employers' search strategies. A nonsequential search process assumes that most vacancies are filled from a pool of applicants, which is formed shortly after the posting of the vacancy. The time spent on recruiting applicants and the duration of the selection process are estimated with a proportional hazard model, via the arrival and attrition rates of applicants.     

Finding the right employee online: determinants of internet recruitment in Spanish firms

This paper analyses the variation of recruitment strategies in Spanish firms, with special emphasis on the Internet. Using data from the Spanish Labour Trends Survey for the period 2001–2011, we study the factors influencing the decision to use online recruitment and explore the differences between Internet and eight traditional recruitment channels. Our results show that the adoption of the Internet monotonically increases over the sample period, when Internet becomes more universal and even in periods with excess of applicants. Large firms operating in information-intensive activities, and located in regions more developed and with better infrastructures are more likely to search for new employees online. We also find that Internet and traditional recruitment methods follow different patterns, especially when using personal referrals and public employment services. Our results suggest the presence of network externalities derived from the increase number of compatible online job seekers.     

What is the right profile for getting a job? A stated choice experiment of the recruitment process

We study the recruitment behaviour of Swedish employers using data from a stated choice experiment. In the experiment, the employers are first asked to describe an employee who recently and voluntarily left the firm and then to choose between two hypothetical applicants to invite to a job interview or to hire as a replacement for their previous employee. The two applicants differ with respect to characteristics such as gender, age, education, work experience, ethnicity, religious beliefs, family situation, weight, and health, but otherwise have similar characteristics as the previous employee. Our results show that employers prefer not to recruit applicants who are old, non-European, Muslim, Jewish, obese, have several children, or have a history of sickness absence. We also calculate the reduction in wage costs needed to make employers indifferent between applicants with and without these characteristics, and find that wage costs would have to be reduced by up to 50 % for applicants with some characteristics.     

Impact of the economic downturn on nursing schools

The challenges posed by the economic downturn on baccalaureate nursing schools in the southeast as it relates to their perceptions of changes in the number of applicants, acceptance rates, employer recruitment efforts, and student clinical and job placement were explored. Responses from deans and program directors indicated nursing schools are experiencing negative effects of the economic downturn in the form of graduates having difficulty finding employment, decreased recruitment efforts from prospective employers, difficulty locating clinical placements for students, and no change in faculty applicants despite an increase in undergraduate student applicants as well as graduate student applicants. These multiple factors combined could signal the death knell for programs that are ill-prepared to deal with such a crisis. Programs need to be aggressive in their efforts to draw health care recruiters as well as qualified faculty applicants to their campuses. Nursing schools must be able to clearly show why their graduates are superior to other programs' graduates when competing for both highly qualified faculty applicants and prospective student employers.     

A Moral Hazard Approach to Wage Discounts under Informal Hiring

This study discusses informal hiring in terms of a standard principal–agent model. We have developed an adverse selection model of the labour market where effort is not contractible and employers have the opportunity to use informal search channels for hiring purposes. This standard framework enables us to provide an effort‐based explanation of the wage gap associated with informal hiring. Besides the wage discount, another feature of the equilibrium is that low‐ability workers informally hired shirk.     

Gender Differences in Recruitment Outcomes

The paper tests the hypothesis that female applicants have a lower probability of being hired from a pool of applicants than their male counterparts. The results indicate that male and female candidates have about the same probability of being hired independently of the type of vacancy. The probability of hiring a candidate of a certain sex is therefore determined by the gender composition of the pool of applicants who have selected themselves on the basis of job characteristics, hiring standards and the type of sector. This indicates that male and female job-seekers select themselves in such a way that they have equal probabilities of being accepted.     

Human Capital Formation and the Decision Makers

Recent empirical work has identified the existence of cultural filters — demographically non-neutral processes whereby employers differentially screen applicants to evaluative attributes and characteristics - and analyzed how they affect differential employment success rates and wage levels. Women are filtered differently than men, and the outcome is disproportionately lower levels of employment and wages. The analysis explores the proposition that, for women to obtain long-term employment at reasonable wages, alternative strategies for workforce participation should be developed at the regional level to better match needs of employers - and the way they filter applicants for those needs, through investment in the target population.     

EQUALITY AND EFFICIENCY: ANTIDISCRIMINATION POLICIES IN THE LABOR MARKET

Some have criticized government antidiscrimination programs for causing efficiency losses both by devoting public resources to monitoring and enforcement and by distorting personnel decisions. This paper examines the efficiency consequences of such programs when discrimination is caused by a market failure and when regulators are imperfectly informed about individual firms' personnel policies.
This paper outlines a simple model of "statistical discrimination" and shows that an equal opportunity rule, which constrains employers from offering different wage schedules to different groups, will improve the efficiency of this economy. Employers will attempt to evade such regulation, and the paper describes an evasion strategy in which employers search for worker "qualifications" that can act as proxies for race or sex. The paper discusses problems involved in monitoring and enforcing compliance, and considers two possible responses by the regulatory agency. The first is analogous to "disparate impact" judgments in which the type of information that employers can use in personnel decisions is regulated. The second is an affirmative action-type policy that monitors the outcomes, rather than the process, of hiring and compensation decisions. Affirmative action policies have some advantages since they permit employers to use information more efficiently than do policies that attempt to regulate personnel decisions directly. However, affirmative action policies are likely to lead to charges of preferential treatment.     

Emerging dual channel system and manufacturer's direct retail channel strategy

The Internet has led many manufacturers to add direct online retail channels to their existing offline retail networks. Using both online and offline channels, manufacturers increase their market coverage and profits by customizing their products and services for the differing needs of customer segments using separate channels. Much recent research on channel management tends to focus on pricing strategies rather than analyzing channel strategies. This paper analyzes optimal channel strategies of manufacturers when they consider online stores as their new direct online channels, and it discusses some strategic implications of these channel strategies from the perspective of consumer heterogeneity and retail services.     

Dissertation abstract: Three essays on the determinants of behavior in the commons-experimental evidence from fishing communities in Colombia

This dissertation presents the results of a series of common pool experiments conducted in three regions of rural Colombia with individuals who face a social dilemma in their everyday lives that is similar to what was presented in the experiment. The research objectives are to develop an empirical characterization of how individual behavior deviates from purely self-interested Nash behavior and to further our understanding of the effects of alternative institutions to promote more conservative choices in common pool experiments.Groups of five subjects participated in a 20-period common pool resource game framed as a harvest decision from a fishery. Every group first played 10 rounds of a baseline limited access common pool resource game and then 10 additional rounds under one of five institutions: face-to-face communication, one of two external regulations, and communication combined with one of the two regulations. The two external regulations consisted of an individual harvest quota that was set at the efficient outcome, but differ with respect to the level of enforcement. A total of 420 individuals participated in the experiments, with individual earnings averaging slightly more than a day’s wages. The results are presented in three essays.The first essay, What Motivates Common Pool Resource Users?, develops and tests several models of pure Nash strategies of individuals who extract from a common pool resource when they are motivated by combinations of self-interest, altruism, reciprocity, inequity aversion or conformity. The results suggest that a model which balances self-interest with a strong preference for conformity best describes average strategies. The data are inconsistent with a model of pure self-interest, as well as models that combine self-interest with individual preferences for altruism, reciprocity and inequity aversion.The second essay, Communication and Regulation to Conserve Common Pool Resources, tests for interaction effects between formal regulations imposed on a community to conserve a local natural resource and non-binding verbal agreements to do the same. The results indicate that formal regulations and informal communication are mutually reinforcing in some instances, but this result is not robust across regions or regulations. Therefore, the hypothesis of a complementary relationship of formal and informal control of local natural resources cannot be supported in general; instead the effects are likely to be community-specific. There is some evidence to suggest that these effects are correlated with the relative importance of formal regulations versus informal community efforts in the community.The third essay, Within and Between Group Variation in Individual Strategies in Common Pools, analyzes the relative effects of groups and individuals within groups in explaining variation in individual harvest decisions for particular institutions, and uses a hierarchical linear model to examine how these sources of variation may vary across institutions. Communication serves to effectively coordinate individual strategies within groups, but these coordinated strategies vary considerably among groups. In contrast, externally-imposed regulatory schemes (as well as unregulated limited access) produce significant variation in the individual strategies within groups, but these strategies are roughly replicated across groups so that there is little between-group variation.     

Return on investment: benefits and challenges of baccalaureate nurse residency program

There are high rates of turnover among graduate nurses within the first year of employment. As the costs of recruitment and orientation have increased, employers are examining new strategies for increasing retention among this population. The Methodist Hospital, Houston, TX, partnered with an academic institution and University Health Consortium to apply an implementation strategy where graduate nurses participate in a year-long residency program. The residents attended monthly sessions that addressed pertinent needs of the group. During this 1-year period turnover decreased from 50% to 13% and return on investment was 326.5%.     

Do Recruitment Ties Affect Wages? An Analysis using Matched Employer–Employee Data from Vietnam

This paper examines the extent to which recruitment ties affect individual wage outcomes in small and medium scale manufacturing firms. Based on a unique matched employer–employee dataset from Vietnam the authors find that there is a significant positive wage premium associated with obtaining a job through an informal contact, when controlling for standard determinants of wage compensation. Moreover, they show that the mechanism through which informal contacts affect wages depends on the type of recruitment tie used. The findings are robust across location, firm size categories, and different worker types.     

Fiscal Revenues and Commitment in Immigration Amnesties

Immigration amnesties aim at reducing the size of the informal sector and identifying employers of undocumented workers. However, potential fiscal gains are also important: tax revenues are crucial in all kinds of amnesties. Nevertheless, over the last thirty years an average of 24% of all applications have been rejected. It remains an open question as to why governments accept this loss of fiscal base. We argue that applying for amnesty is basically self-incrimination, and that immigration-averse governments have an incentive to use applications as a means to identify and expel illegal workers. In equilibrium only applicants with the highest income are granted amnesty, while the poorest immigrants do not apply, and fiscal revenues remain sub-optimal. We show that electoral accountability can solve the commitment problem. However, the large number of rejections suggests that the strict voter-coordination required by this mechanism is hard to obtain in practice. Therefore immigration amnesties seem doomed to inefficiency.