Corporate Hiring under Uncertainty

Duc Duy Nguyen and Vathunyoo Sila

The Review of Corporate Finance Studies, 2025, vol. 14, issue 4, 949-988

Abstract: Using granular data on job postings and employee flows, we examine how firms adjust human capital investments during periods of uncertainty brought on by gubernatorial elections. We find that firms reduce job postings in the 6 months leading up to an election, particularly advertisements for more costly to reverse positions (highly skilled, less flexible, or unionized). We also explore the sources of election uncertainty and find stronger effects in elections where public interests more heavily focus on labor issues. Our results are consistent with the real options framework, where firms adopt a “wait and see” approach in response to uncertainty. (JEL J2, G3)

Date: 2025
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