Aggregate Recruiting Intensity

Alessandro Gavazza, Simon Mongey and Giovanni Violante

No 22677, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a 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 micro evidence, in the model fast-growing firms invest more in recruiting activities and achieve higher job-filling rates. In equilibrium, individual decisions of hiring firms aggregate into an index of economy-wide recruiting intensity. We use the model to study how aggregate shocks transmit to recruiting intensity, andwhether this channel can account for the dynamics of aggregate matching efficiency around the Great Recession. Productivity and financial shocks lead to sizable pro-cyclical fluctuations inmatching efficiency through recruiting effort. Quantitatively, the main mechanism is that firms attain their employment targets by adjusting their recruiting effort as labor market tightness varies. Shifts in sectoral composition can have a sizable impact on aggregate recruiting intensity. Fluctuations in new-firm entry, instead, have a negligible effect despite their contribution to aggregate job and vacancy creations.

JEL-codes: E24 E32 J21 J23 J63 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-dge, nep-lma and nep-mac
Note: EFG
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Citations: View citations in EconPapers (12)

Published as Alessandro Gavazza & Simon Mongey & Giovanni L. Violante, 2018. "Aggregate Recruiting Intensity," American Economic Review, vol 108(8), pages 2088-2127.

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Related works:
Journal Article: Aggregate Recruiting Intensity (2018)
Working Paper: Aggregate recruiting intensity (2018)
Working Paper: Aggregate Recruiting Intensity (2017)
Working Paper: Aggregate recruiting intensity (2016)
Working Paper: Aggregate Recruiting Intensity (2016)
Working Paper: Aggregate recruiting intensity (2016)
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