Aggregate Recruiting Intensity

Alessandro Gavazza, Simon Mongey and Giovanni L. Violante

No 553, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: We develop an equilibrium model of firm dynamics with random search in the labor market where hiring firms exert recruiting effort by spending resources to fill vacancies faster. Consistent with microevidence, fast-growing firms invest more in recruiting activities and achieve higher job-filling rates. These hiring decisions of firms aggregate into an index of economy-wide recruiting intensity. We study how aggregate shocks transmit to recruiting intensity, and whether this channel can account for the dynamics of aggregate matching efficiency during the Great Recession. Productivity and financial shocks lead to sizable pro-cyclical fluctuations in matching efficiency through recruiting effort. Quantitatively, the main mechanism is that firms attain their employment targets by adjusting their recruiting effort in response to movements in labor market slackness.

Keywords: Recruiting intensity; Unemployment; Macroeconomic shocks; Vacancies; Aggregate matching efficiency; Firm dynamics (search for similar items in EconPapers)
JEL-codes: E24 E32 E44 G01 J23 J63 J64 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2017-08-25
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Aggregate Recruiting Intensity (2018)
Working Paper: Aggregate recruiting intensity (2018)
Working Paper: Aggregate recruiting intensity (2016)
Working Paper: Aggregate Recruiting Intensity (2016)
Working Paper: Aggregate recruiting intensity (2016)
Working Paper: Aggregate Recruiting Intensity (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:553

DOI: 10.21034/sr.553

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