Hiring Frictions in a Regulated Occupation: Evidence from US Laboratories

Abstract

Determining the nature and source of hiring frictions is an important topic for policymakers, as these frictions impact both worker outcomes and economic growth. To date, there has been very little US-based research that has combined detailed measures of employer skill requirements, market structure, organizational characteristics and hiring difficulties at the establishment level. Prior to this study, there has been almost no research that has investigated these issues in the context of a highly regulated industry such as healthcare, which employs more workers than either retail or manufacturing. Using a unique, nationally representative dataset, this study finds that organizational practices and market structure are more relevant predictors of hiring difficulties for laboratory technologists than factors, such as skill mismatch, that are often assumed to be of primary importance.Disagreement over the factors responsible for hiring challenges is a perennial feature of economic discourse in many countries (Brunello and Wruuck 2019; CEDEFOP 2015; ILO 2014). Many analysts -along with conventional wisdom -have pointed to skill deficiencies in the labour force as a primary culprit (ECB 2012; Manpower 2015;Rothwell 2014; WEF 2014). At the same time, other researchers have stressed the key role of alternative explanations, such as organizational choices, regulations and market structure, in determining labour-market outcomes (Cappelli 2015;Gambin et al. 2016;Green 2013;Kleiner and Krueger 2013). The debate has been hampered by the lack of nationally representative, establishmentlevel data that include measurements of items such as employer skill requirements, job design, management strategy, level of automation and market characteristics. The limited research on this topic in the United