Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

Stefan Eriksson and Dan-Olof Rooth

American Economic Review, 2014, vol. 104, issue 3, 1014-39

Abstract: 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.

JEL-codes: E24 J23 J64 J71 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.3.1014
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Citations: View citations in EconPapers (212)

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Working Paper: Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment (2011)
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