The wage elasticity of recruitment

Boris Hirsch, Elke Jahn, Alan Manning and Michael Oberfichtner

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: One of the factors affecting the market power of employers is the extent to which higher wages makes recruitment easier. There is very little research on this. This paper presents a methodology for estimating the wage elasticity of recruitment and applies it to German data. Our estimates of the wage elasticity of recruitment are about 1.4. We also report evidence that high-wage employers are more selective in hiring, in which case the relevant recruitment elasticity should be higher, about 2.2. Together with prior estimates of the quit elasticity these results imply that wages are 72-77% of the marginal product of labour. Further, we find lower elasticities for recruits hired from non-employment as well as for women, non-German nationals, non-prime-age workers, less skilled workers, and workers with less complex jobs.

Keywords: monopsony; imperfect labour markets; wage elasticity of recruitment (search for similar items in EconPapers)
Date: 2022-11-08
New Economics Papers: this item is included in nep-lma and nep-ltv
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The wage elasticity of recruitment (2022)
Working Paper: The Wage Elasticity of Recruitment (2022)
Working Paper: The wage elasticity of recruitment (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1883

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