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Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process

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  • KAMBAYASHI, Ryo
  • KAWAGUCHI, Kohei
  • OTANI, Suguru

Abstract

Estimating recruitment elasticity is complex due to the multi-stage, bilateral decisionmaking process involving workers and employers in job matching. To measure it, this study uses novel data from a major job-matching intermediary in Japan and investigates the selectivity of vacancies and worker wage elasticities at each stage of the job-matching process from applications to offer acceptances. Our findings reveal that vacancies exhibit greater selectivity for job offers compared to interview invitations. Worker application elasticities range between 0.05 and 0.21, contingent upon previous wage and employment status. However, interview attendance elasticities are statistically insignificant and offer acceptance elasticities of approximately 0.05. These results suggest that workers exhibit reduced sensitivity to wages during interview attendance decisions, anticipating competition from fellow applicants. The elasticities are higher for above-median wage workers compared to their below-median counterparts, supporting this interpretation. Implied recruitment elasticities do not exceed 1, even for the estimated upper bound, reflecting the strong market power of employers.

Suggested Citation

  • KAMBAYASHI, Ryo & KAWAGUCHI, Kohei & OTANI, Suguru, 2023. "Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process," Discussion Paper Series 746, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:746
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    Cited by:

    1. Suguru Otani, 2024. "Nonparametric Estimation of Matching Efficiency and Elasticity on a Private On-the-Job Search Platform: Evidence from Japan, 2014-2024," Papers 2410.17011, arXiv.org, revised Dec 2024.

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    More about this item

    Keywords

    Market power of employers; Monopsony; Job matching intermediary; Recruitment elasticity; Application; Interview; Offer; Control function approach;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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