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Discretion in Hiring

Mitchell Hoffman, Lisa Kahn and Danielle Li

No 21709, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Job testing technologies enable firms to rely less on human judgement when making hiring decisions. Placing more weight on test scores may improve hiring decisions by reducing the influence of human bias or mistakes but may also lead firms to forgo the potentially valuable private information of their managers. We study the introduction of job testing across 15 firms employing low-skilled service sector workers. When faced with similar applicant pools, we find that managers who appear to hire against test recommendations end up with worse average hires. This suggests that managers often overrule test recommendations because they are biased or mistaken, not only because they have superior private information.

JEL-codes: J24 M51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm and nep-lma
Date: 2015-11
Note: LS
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Published as Mitchell Hoffman & Lisa B Kahn & Danielle Li, 2018. "Discretion in Hiring*," The Quarterly Journal of Economics, vol 133(2), pages 765-800.

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