Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In this paper, we use unique data from a field experiment in the Swedish labor market to investigate how past and contemporary unemployment affect a young worker's probability of being invited to a job interview. In contrast to studies using registry/survey data, we have complete control over the information available to the employers and there is no scope for unobserved heterogeneity. We find no evidence that recruiting employers use information about past unemployment to sort workers, but some evidence that they use contemporary unemployment to sort workers. The fact that employers do not seem to use past unemployment as a sorting criterion suggests that the scarring effects of unemployment may not be as severe as has been indicated by previous studies.JEL Classification: J64

Etterlater arbeidstrening arr hos unge ledige? Et vignett-eksperiment av arbeidsgiveres beslutninger ved ansettelser av unge i Norge

“…I tillegg spiller nivået på stillingen det søkes til en viktig rolle. Arbeidsgivere som rekrutterer til stillinger som krever lavt eller middels ferdighetsnivå, er i større grad tilbøyelige til å avvise søkere med ledighetserfaring, mens arbeidsgivere som rekrutterer til stillinger som krever høyere grad av ferdigheter, har høyere toleranse for søkere med ledighetserfaring (Eriksson & Rooth 2014)…”

Does marital status affect how firms interpret job applicants’ un/employment histories?

“…Eriksson and Rooth (2014) Belgium of extended periods of unemployment to that of working at a job for which the applicant is overqualified. They too confirm the stigma effect of long-term unemployment found by others.…”

Job Search Strategies and Unemployment Duration

“…Regarding the explanation of this phenomenon there is, however, a debate in the literature (Machin and Manning 1999: 12): according to some studies, unobserved heterogeneity explains this outcome, whereby the most employable workers leave unemployment quickly while the least employable remain in the group of the unemployed. Other authors have argued that there is true duration dependence, meaning either that long spells of unemployment reduce reemployment prospects because the workers lose their knowhow, motivation and selfconfidence or that employers perceive long unemployment spells as a negative signal of workers' abilities (Pissarides 1992;Flückiger 2002: 15;Eriksson andRooth 2014: 1029;Kroft et al 2013Kroft et al : 1128.…”