Working Paper: NBER ID: w26231
Authors: Simon Mongey; Giovanni L. Violante
Abstract: We merge QCEW and JOLTS microdata to study the recruiting intensity of firms in the cross-section and over time. We show that vast establishment-level heterogeneity in vacancy filling rates is entirely explained by differences in gross hiring rates. We provide theory that supports these empirical facts and, through the lens of this theory, aggregate firm-level decisions and data into an empirical measure of aggregate recruiting intensity (ARI).We find that procyclicality of ARI is primarily due to cutting recruiting effort in slack labor markets. This leads us to formulate an ARI index easily computable from publicly available macroeconomic time series. Declining ARI in the Great Recession accounted for much of the increase in unemployment, but little of its persistence.
Keywords: Recruiting Intensity; Labor Market; Unemployment; Microdata; JOLTS; QCEW
JEL Codes: E24; E32
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 yields (R33) |
| slack labor markets (J46) | recruiting efforts (M51) |
| recruiting efforts (M51) | job finding rate (J68) |
| decrease in ARI (Q15) | increase in unemployment (J64) |
| ARI (C22) | unemployment dynamics (J64) |