Working Paper: NBER ID: w22202
Authors: Edward P. Lazear; Kathryn L. Shaw; Christopher T. Stanton
Abstract: A model of hiring into posted job slots suggests hiring is based on comparative advantage: being hired depends not only on one’s own skill but also on the skills of other applicants. The model has numerous implications. First, bumping of applicants occurs when one job-seeker is slotted into a lower paying job by another applicant who is more skilled. Second, less able workers are more likely to be unemployed because they are bumped. Third, vacancies are higher for harder to fill skilled jobs. Fourth, some workers are over-qualified for their jobs whereas others are under-qualified. These implications are borne out using four different data sets.
Keywords: No keywords provided
JEL Codes: D83; J01; J2; J21; J23; J24; J6; J62; J64; M5; M51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| less able workers (J79) | higher likelihood of being unemployed (J68) |
| higher ability workers (J24) | lower likelihood of being unemployed (J68) |
| higher ability workers (J24) | wider variety of jobs available (J29) |
| vacancy rates (R33) | higher for skilled jobs (J24) |
| presence of better-qualified applicants (J79) | influences hiring decisions (M51) |
| bumping occurs (E32) | lower ability worker assigned to less suitable job (J29) |
| overqualified workers (J24) | experience wage gaps (J31) |
| underqualified workers (J24) | experience wage gaps (J31) |