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.     

Asset accumulation and short-term employment

If access to credit is limited (especially when young or unemployed) but “bad” jobs are easy to come by, then job seekers might use short term employment in undesirable jobs as a way to finance consumption during subsequent unemployed search for a “good” job. In this paper we explore this idea by building a theoretical model of job search by risk averse, debt constrained agents. In this model we characterise analytically conditions under which voluntary planned separations occur as agents cycle between accumulating assets in short term employment and unemployed search for more desirable employment.     

Career Paths,Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized?

This paper studies the implications of learning‐by‐doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low‐skill jobs suffer from a poaching behavior by firms with high‐skill jobs, causing a shortage of low‐skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high‐skill jobs and subsidizing the output of low‐skill jobs, restores market efficiency and reduces youth unemployment.     

STRUCTURAL EMPIRICAL EVALUATION OF JOB SEARCH MONITORING

To evaluate search effort monitoring of unemployed workers, it is important to take account of post‐unemployment wages and job‐to‐job mobility. We structurally estimate a model with search channels, using a controlled trial in which monitoring is randomized. The data include registers and survey data on search behavior. We find that the opportunity to move to better‐paid jobs in employment reduces the extent to which monitoring induces substitution toward formal search channels in unemployment. Job mobility compensates for adverse long‐run effects of monitoring on wages. We examine counterfactual policies against moral hazard, like reemployment bonuses and changes of the benefits path.     

失业保险金与再就业行为

现有的失业理论及实证研究都认为失业保险金的提高会增加失业者的失业持续时间。在本文中,我们试图从失业者面临工作机会的工资分布结构出发,对失业保险金与失业者再就业工资分布的关系进行描述。通过对传统工作搜寻理论模型的扩展,我们证明失业保险金对失业持续时间的影响存在三种不同的传导路径,同时我们得到两个推论:失业保险金的增加一方面将提高失业者接受"高"工资工作机会的概率;但另一方面对失业者从事"低"工资工作机会的影响是不确定的。如果将正式工作视为"高"工资的工作机会,而将非正式工作视为"低"工资的工作机会;则基于微观层面的数据所进行的实证研究结果验证了我们的推论。     

The determinants of migrating with a pre-arranged job and of the initial duration of urban unemployment: an analysis based on Indian data on rural-to-urban migrants

"Based on survey data on 1,400 rural migrants in Delhi, this paper examines within a multivariate context the determinants of migrating with a pre-arranged job and of the initial duration of urban unemployment. The results show that the probability of moving with a pre-arranged job increases with education and with age, and is higher for those who seek non-manual jobs. For migrants who arrive in the city without a pre-arranged job, unemployment duration depends on marital status, premigration information on urban employment opportunities, and on the reliance on contacts for job search."     

Job search and academic achievement

The paper develops a structural model for the labor market behavior of students entering the labor market. We explicitly model the trade-off between devoting effort to studying and to job search. Furthermore, we allow for on-the-job search. The model is estimated using a unique data set of individuals who completed undergraduate education in the Netherlands between 1995 and 2001. Our estimation results show that labor market returns of high grades are low. Wage increases between jobs are explained by labor market friction rather than returns of early work experience. Our results indicate that a 1 percentage point decrease in the unemployment rate increases wage offers on average by 3 percent, but that the amount of job search effort is not very sensitive to business cycle fluctuations. Policy simulations show that study effort and hence academic achievement are much more sensitive to financial incentives than job search effort and labor market outcomes.     

Labor Market Experiment

This experiment involves having students search in a hypothetical job market for jobs paying wages in a known range but an unknown wage distribution. Different trials change variables to allow for search costs, unemployment insurance, recessions, and investment in human capital.     

The Effectiveness of Indigenous Job Search Strategies

This analysis uses the only existing large-scale longitudinal survey of Indigenous Australians to examine the effects of job search behaviour over an 18-month period starting from March 1996. Job search methods were not generally related to the probability of finding and retaining employment when a range of other personal and regional factors are taken into account. Search intensity (as measured by the number of jobs applied for) had a significant effect on the prospect of finding employment, but was unrelated to the probability of job retention.     

NETWORK SEARCH: CLIMBING THE JOB LADDER FASTER

We introduce an irregular network structure into a model of frictional, on‐the‐job search in which workers find jobs through their network connections or directly from firms. We show network‐found jobs have higher wages, and thus better‐connected workers climb the job ladder faster. The mean field approach allows us to formulate heterogeneous workers' recursive problem tractably. Our calibration is consistent with several empirical findings because of a composition—not information—effect. We also introduce new model‐consistent evidence: Job‐to‐job switches at higher ladder rungs are more likely to use networks.     

Heterogeneous Jobs and the Aggregate Labour Market

This paper analyses a simple search‐and‐matching model with heterogeneous jobs. First, I derive an explicit formula that ensures the social efficiency of the equilibrium outcome. This formula generalises the well‐known Hosios condition and clarifies the role of externalities across labour markets for different types of jobs. Second, business cycle fluctuations with heterogeneous jobs are analysed. Heterogeneity in productivity and job stability plays an important role in generating strong labour‐market responses to productivity shocks.     

On the Provision of Insurance against Search‐Induced Wage Fluctuations*

Should workers be provided with insurance against search‐induced wage fluctuations? To answer this question, I rely on the numerical simulations of a model of on‐the‐job search and precautionary savings. The model is calibrated to low‐skilled workers in the United States. The extent of insurance is determined by the degree of progressivity of a non‐linear transfer schedule. The fundamental trade‐off is that a more generous provision of insurance reduces incentives to search for better‐paying jobs, which increases the cost of providing insurance. I show that progressivity raises the search intensity of unemployed workers, which reduces the equilibrium rate of unemployment, but it lowers the search intensity of employed job seekers, which reduces the output level. I also solve numerically for the optimal non‐linear transfer schedule. The optimal policy is to provide little insurance up to a monthly income level of $1350, so as to preserve incentives to move up the wage ladder, and nearly full insurance above $1450. This policy reduces the standard deviation of labor income net of transfers by 34 per cent and generates a consumption‐equivalent welfare gain of 0.7 per cent. The absence of private savings does not fundamentally change the shape of the optimal transfer function, but tilts the optimal policy towards more insurance, at the expense of a less efficient allocation of workers across jobs.     

Partial unemployment insurance benefits and the transition rate to regular work

In Finland, unemployed workers who are looking for a full-time job but take up a part-time or very short full-time job may qualify for partial unemployment benefits. In exchange for partial benefits, these applicants must continue their search of regular full-time work. This study analyzes the implications of working on partial benefits for subsequent transitions to regular employment. The timing-of-events approach is applied to distinguish between causal and selectivity effects associated with the receipt of partial benefits. The results suggest that partial unemployment associated with short full-time jobs facilitates transitions to regular employment. Also part-time working on partial benefits may help men (but not women) in finding a regular job afterwards.     

The Theory of Differential Overqualification: Does it Work?

The theory of differential overqualification, developed by Robert Frank (1978),claims that married women in smaller labour markets have a higher risk of workingin jobs for which they are overqualified. This stems from the problem of dual jobsearch for couples which is much more difficult to optimize than single job search.Here, for several reasons husbands tend to first optimize their individual job search.Their wives are `tied movers' or `tied stayers' in the sense that their job search isundertaken under the condition that the job search of their husbands is optimized.This leads especially in smaller labour markets to a higher risk of a mismatchbetween formal qualifications and job requirements. The only specific empiricaltest of this theory, until now, has been performed by McGoldrick and Robst (1996) . Their results, using US data, do not support the theory. Using Germanpanel data (GSOEP), we also test the theory of differential overqualification.Unlike previous studies we control for commuting distances and our own resultsprovide some mixed support for the differential overqualification hypothesis.     

Job creation and job types – New evidence from Danish entrepreneurs

We extend earlier analyses of the job creation of start-ups versus established firms by considering the educational content of the jobs created and destroyed. We define education-specific measures of job creation and job destruction at the firm level, and we use these measures to construct a measure of “surplus job creation”, defined as jobs created on top of any simultaneous destruction of similar jobs in incumbent firms in the same region and industry. Using Danish employer-employee data from 2002–2007 that identify the start-ups and that cover almost the entire private sector, these measures allow us to provide a more nuanced assessment of the role of entrepreneurial firms in the job-creation process than in previous studies. Our findings show that although start-ups are responsible for the entire overall net job creation, incumbents account for more than one-third of net job creation within high-skilled jobs. Moreover, start-ups “only” create approximately half of the surplus jobs and even less of the high-skilled surplus jobs. Finally, our approach allows us to characterise and identify differences across industries, educational groups and regions.     

TRADE BARRIERS IN THE PACIFIC FOREST SECTOR: WHO WINS AND WHO LOSES

This study uses a global model of the forest sector to examine changes in log production, consumption, prices, and trade and discusses the impacts of changes on economic wealth transfers for log export ban and log export tax scenarios. The results indicate that trade barriers are inefficient in allocating logs to domestic processors when a supply shortage exists. The trade barrier produces economic losses that exceed the benefits to the processors. A log export ban reduces log prices in the Pacc North-west by 8.5% and reduces timber harvests by 6.7%. The logs diverted to domestic mills save 1,208 more jobs than log export job losses but at an average annual cost of £230,463 per job saved. Economic transfers benefit lumber producers in the region under the ban. However, the benefits amount to 61% of regional timber producer losses including losses in the log export price premium, 39% of the loss to Asian processors, and 55% of the global consumer losses. Globally, lumber consumers lose £733 million. A log export tax scenario produces smaller impacts on prices and harvests since it does not eliminate total log exports. The tax scenario saves no jobs, and the average economic gain per job lost is £24,251 or about two-thirds of the current average salary in the forest products sector in the region. A log tax has the ability to retain £78 million in tax revenues.     

Equilibrium urban unemployment in developing countries: is migration the culprit?

"This paper challenges the prediction of Todaro's model of rural-to-urban migration that an 'increase in urban employment increases urban unemployed.' It is shown that if the urban demand for labor is isoelastic or inelastic, creation of urban jobs causes urban unemployment to decline and urban-to-rural migration to take place. Moveover, urban job creation always reduces the rate of urban unemployment. The paper then remodels the urban job search process and derives the result that equilibrium urban unemployment would not vanish even if the urban-rural wage gap were eliminated." The geographical focus is on developing countries.     

The Sullying Effect of Recessions

Previous work has established that recessions involve a "cleansing" effect, so that in downturns, only high productivity jobs remain. But empirical evidence suggests job quality is procyclical: jobs created in recessions are likely to be low-paying and temporary. This paper modifies previous models by adding on-the-job search, which leads to an additional "sullying" effect. Calibration of the model suggests this offsetting sullying effect is likely to be much larger than the cleansing effect, and can account for the procyclical match quality we observe in the data.     

Optimal unemployment insurance in an estimated job search model with savings

This paper estimates a job search model with savings on Danish micro data that include observations on wealth and wages. Controlling for extensive observed and unobserved worker characteristics heterogeneity, the estimation relates observed unemployment spells to the model implied hazard rate for each worker. The model estimates are sensible and fit the data well. Optimal UI policy is determined in the estimated model as a trade-off between insurance provision and distortion of search incentives. The analysis emphasizes an important policy sensitivity to the interest rate and the importance of including transitional dynamics in the analysis.     

JOB SEPARATION OUTCOMES OF WELFARE HIRES: INSIGHT FROM LINKED PERSONNEL AND STATE ADMINISTRATIVE DATA

This article makes use of a unique personnel data set and state administrative data to follow welfare and nonwelfare hires that separate from similar jobs with the same firm. Welfare hires are more likely to be on welfare after separation but are equally likely as similarly low–skilled nonwelfare hires to transition to another job after separation. Among those with a new job, welfare hires experience a significantly lower wage gain, suggesting that welfare hires would benefit (even more than nonwelfare hires) from focused assistance with job search and transition skills. ( JEL H53, J62, C35)