Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process

Ryo Kambayashi (), Kohei Kawaguchi and Suguru Otani

No 746, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Estimating recruitment elasticity is complex due to the multi-stage, bilateral decisionmaking process involving workers and employers in job matching. To measure it, this study uses novel data from a major job-matching intermediary in Japan and investigates the selectivity of vacancies and worker wage elasticities at each stage of the job-matching process from applications to offer acceptances. Our findings reveal that vacancies exhibit greater selectivity for job offers compared to interview invitations. Worker application elasticities range between 0.05 and 0.21, contingent upon previous wage and employment status. However, interview attendance elasticities are statistically insignificant and offer acceptance elasticities of approximately 0.05. These results suggest that workers exhibit reduced sensitivity to wages during interview attendance decisions, anticipating competition from fellow applicants. The elasticities are higher for above-median wage workers compared to their below-median counterparts, supporting this interpretation. Implied recruitment elasticities do not exceed 1, even for the estimated upper bound, reflecting the strong market power of employers.

Keywords: Market power of employers; Monopsony; Job matching intermediary; Recruitment elasticity; Application; Interview; Offer; Control function approach (search for similar items in EconPapers)
JEL-codes: J20 J30 J42 J64 L13 L40 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2023-07
New Economics Papers: this item is included in nep-com and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hituec:746

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