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Filling vacancies: an empirical analysis of the cost and benefit of search in the labour market

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  • Giovanni Russo
  • Wolter Hassink
  • Cees Gorter

Abstract

This paper investigates empirically the factors that affect the cost-benefit ratio of employers' search. The empirical analysis is based on a small Dutch data set containing individual information on filled vacancies. It is found that firms that use advertisements during recruitment are sensitive to labour market conditions; their search cost per applicant rises (drops) in tight (slack) labour markets because of the diminished ability of advertisements to generate applicants in tight labour markets. Furthermore, it is found that the high search cost incurred by posting identical vacancies is more than compensated for by the benefits from having a larger flow of applicants.

Suggested Citation

  • Giovanni Russo & Wolter Hassink & Cees Gorter, 2005. "Filling vacancies: an empirical analysis of the cost and benefit of search in the labour market," Applied Economics, Taylor & Francis Journals, vol. 37(14), pages 1597-1606.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:14:p:1597-1606
    DOI: 10.1080/00036840500217069
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    References listed on IDEAS

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    1. Barron, John M & Bishop, John & Dunkelberg, William C, 1985. "Employer Search: The Interviewing and Hiring of New Employees," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 43-52, February.
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    3. Abbring, J. H. & van Ours, J. C., 1994. "Sequential or non-sequential employers' search?," Economics Letters, Elsevier, vol. 44(3), pages 323-328.
    4. Lancaster,Tony, 1992. "The Econometric Analysis of Transition Data," Cambridge Books, Cambridge University Press, number 9780521437899, January.
    5. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 417-434.
    6. Cees Gorter & Jos Van Ommeren, 1999. "Sequencing, timing and filling rates of recruitment channels," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1149-1160.
    7. Burgess, Simon M, 1993. "A Model of Competition between Unemployed and Employed Job Searchers: An Application to the Unemployment Outflow Rate in Britain," Economic Journal, Royal Economic Society, vol. 103(420), pages 1190-1204, September.
    8. Simon, Curtis J & Warner, John T, 1992. "Matchmaker, Matchmaker: The Effect of Old Boy Networks on Job Match Quality, Earnings, and Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 306-330, July.
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    Cited by:

    1. Jos van Ommeren & Giovanni Russo, 2004. "Sequential or Non-sequential Recruitment?," Tinbergen Institute Discussion Papers 04-109/3, Tinbergen Institute, revised 15 Sep 2008.
    2. Marilyn S. Nanney & Samuel L. Myers & Man Xu & Kateryna Kent & Thomas Durfee & Michele L. Allen, 2019. "The Economic Benefits of Reducing Racial Disparities in Health: The Case of Minnesota," IJERPH, MDPI, vol. 16(5), pages 1-13, March.
    3. Saglam, Bahar Bayraktar & Sayek, Selin, 2011. "MNEs and wages: The role of productivity spillovers and imperfect labor markets," Economic Modelling, Elsevier, vol. 28(6), pages 2736-2742.
    4. Jos van Ommeren & Giovanni Russo, 2014. "Firm Recruitment Behaviour: Sequential or Non-sequential Search?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 432-455, June.
    5. Pedro Gomes, 2009. "Labour market effects of public sector employment and wages," 2009 Meeting Papers 313, Society for Economic Dynamics.
    6. Brenčič, Vera, 2024. "Distribution of vacancies and new hires across employers: Implications for job offers, skill requirements, and employers’ search outcomes," Labour Economics, Elsevier, vol. 91(C).

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