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Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Linnéuniversitetet .
2014 (English)In: The American Economic Review, ISSN 0002-8282, E-ISSN 1944-7981, Vol. 104, no 3, 1014-1039 p.Article in journal (Refereed) Published
Abstract [en]

The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment, we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminate this negative signal. Nor do employers treat contemporary short-term unemployment spells differently, suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects.

Place, publisher, year, edition, pages
2014. Vol. 104, no 3, 1014-1039 p.
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URN: urn:nbn:se:uu:diva-219848DOI: 10.1257/aer.104.3.1014ISI: 000334497800010OAI: oai:DiVA.org:uu-219848DiVA: diva2:703244
Available from: 2014-03-05 Created: 2014-03-05 Last updated: 2014-05-27Bibliographically approved

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