Working Paper: CEPR ID: DP10662
Authors: Ricardo Alonso
Abstract: This paper studies employer recruitment and selection of job applicants when productivity is match-specific. Job seekers have private, noisy estimates of match value, while the firm performs noisy interviews. Job seekers' willingness to incur the application costs varies with the perceived hiring probability, while the firm considers the applicant pool's composition when setting hiring standards. I show that changes in the accuracy of job seekers' estimates, or the firm's interview, affect application decisions, and both can raise hiring costs when they discourage applications. Thus, the firm may favor noisier interviews or prefer to face applicants that are less informed of their person-organization fit.
Keywords: Employer search; Hiring; Recruitment; Selection
JEL Codes: D21; D82; L23; M12; M51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| improved selection (C52) | discourage applications (J68) |
| discourage applications (J68) | raise hiring costs (J39) |
| improved selection (C52) | increased recruitment costs (J39) |
| accuracy of job seekers' estimates (J29) | application decisions (M51) |
| firm's interview accuracy (C52) | application decisions (M51) |
| improved selection techniques (C52) | perceived quality of applicants (J24) |
| perceived quality of applicants (J24) | firm's hiring strategy (M51) |
| more informative interview process (C99) | reduce hiring mistakes (M51) |
| more informative interview process (C99) | smaller applicant pool (J79) |
| smaller applicant pool (J79) | raise hiring costs (J39) |