Working Paper: CEPR ID: DP14004
Authors: Giovanni L. Violante; Simon Mongey
Abstract: We merge QCEW and JOLTS microdata to study the recruiting intensity of firms in the cross section and over time. Vast establishment-level heterogeneity in vacancy filling rates is entirely explained by differences in gross hiring rates. Through the lens of standard theory, we aggregate firm-level decisions into an measure of aggregate recruiting intensity (ARI). Procyclicality of ARI is primarily due to cutting recruiting effort in slack labor markets. Given this we provide an ARI index easily computable from publicly available macroeconomic data. Declining ARIin the Great Recession accounted for much of the increase in unemployment, but little of its persistence.
Keywords: aggregate matching efficiency; firm heterogeneity; recruiting intensity; unemployment; vacancies
JEL Codes: J63; J64; E24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| gross hiring rates (J63) | vacancy filling rates (J63) |
| labor market conditions (J29) | recruiting efforts (M51) |
| decline in ARI during the Great Recession (F44) | decrease in job finding rate (J68) |
| decline in ARI during the Great Recession (F44) | slow recovery of job finding rate (J68) |