Employers' Search and the Efficiency of Matching

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 21.12.2004, 12:15 - 13:30

   

Presentation by 

Michele Pellizzari (University of Geneva)
   

Abstract:

Labour turnover is typically higher for unskilled workers in low productivity jobs. This paper suggests that this empirical finding is due to the matching process being less efficient at the bottom than at the top of the jobs' distribution. A simple theoretical model of employers' search shows that firms find it optimal to invest relatively little in advertisement and screening when recruiting for low productivity jobs. This generates more separations and higher turnover. Unique data from a sample of recruiting establishments in Britain, containing detailed information about employers’ recruitment practices, are used to test the implications of the model.

   
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