Worker Selection, Hiring, and Vacancies

Abstract

This paper incorporates worker selection into a random matching model with multi-worker firms. Unlike the standard Diamond-Mortensen-Pissarides (DMP) model, the extended model is compatible with cross-sectional behavior of vacancy yields, which rise with employment growth and worker turnover, but fall with establishment size. Using calibrated versions of the standard and worker selection models, I show that accounting for these patterns has quantitatively important policy implications. I also compare the worker selection and the directed search models. While both models account for these patterns equally well, they differ with regard to labor market policy. (JEL E24, J23, J63, J64)

Recruiting intensity and hiring practices: Cross-sectional and time-series evidence

“…In addition, we find evidence that a larger employment growth rate is associated with a larger labor selection rate (in the positive part of the employment growth distribution). This is in line with the model by Baydur (2017), who shows that faster growing establishments become less selective.…”

“…Several points are worthwhile emphasizing in this context: First, the increasing selection rate in the positive part of the employment growth distribution is in line with positive idiosyncratic productivity shocks. Baydur (2017) shows that growing firms become less selective, i.e. they have a higher selection rate.…”

Hartz IV and the decline of German unemployment: A macroeconomic evaluation

“…As a rule of thumb, the cut of benefits for long-term unemployed was larger for high income and high wealth households. The former faced a large drop because the new system 9 While our paper focuses on the time series dimension of the data, Baydur (2017) shows that a selection model can also replicate important cross-sectional dimensions of the data (e.g. the cross-sectional behaviour of vacancy yields, as outlined by Davis/Faberman/Haltiwanger (2013)).…”

Recruitment Policies, Job-Filling Rates and Matching Efficiency

“…Recent work extends the canonical Diamond-Mortensen-Pissarides framework to feature multi-worker firms which chose search e ort as in Gavazza/ Mongey/Violante (2018) and Leduc/Liu (2017) or wages as in the competitive-search models of Kaas/Kircher (2015) and Schaal (2017). Selection cuto s among heterogenous pools of applicants (hiring standards) are also introduced in random search environments like the ones proposed by Acharya/Wee (2020), Baydur (2017), Chugh/Merkl (2016), Sedlacek (2014) and Villena-Roldan (2012). Our paper proposes a unified framework to study these three di erent measures of recruiting intensity and to quantify them in accordance with our empirical findings.…”