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Recruitment of Seemingly Overeducated Personnel: Insider--Outsider Effects on Fair Employee Selection Practices

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  • Oliver Fabel
  • Razvan Pascalau

Abstract

Fair employment policies constrain employee selection: specifically, applicants’ professional experience can be a substitute for formal education. However, reflecting firm-specific job requirements, this substitution rule applies less strictly to applicants from outside the firm. Further, setting low educational job requirements decreases the risk of disparate impact charges. Using data from a large US public employer, we show that successful outsider candidates exhibit higher levels of formal education than insiders. Also, this gap in educational attainments between outsiders and insiders widens with lower advertised degree requirements. More generally, we find strong insider'outsider effects on hiring decisions .

Suggested Citation

  • Oliver Fabel & Razvan Pascalau, 2013. "Recruitment of Seemingly Overeducated Personnel: Insider--Outsider Effects on Fair Employee Selection Practices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(1), pages 57-82, February.
    • Handle: RePEc:taf:ijecbs:v:20:y:2013:i:1:p:57-82
    DOI: 10.1080/13571516.2012.715271
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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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