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Decomposing Recruitment Elasticity in Job Matching

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  • Kambayashi, Ryo
  • Kawaguchi, Kohei
  • Otani, Suguru

Abstract

The wage elasticity of recruitment is a key indicator of employer market power in the labor market. This study estimates and decomposes this elasticity using data from Japan’s largest private job-matching intermediary. On average, our findings reveal that recruitment elasticity is not significantly different from zero. However, this average masks important heterogeneity: workers earning above the median wage exhibit positive elasticity, while those earning below the median show an insignificant but negative elasticity. Further analysis suggests that the negative elasticity among lower-wage workers stems from their reluctance to inquire about higher-wage vacancies. Additionally, we uncover several notable patterns: there are minimal systematic differences in elasticity between on-the-job and off-the-job searches; workers tend to choose similar job types and locations during the inquiry and application stages; and the matched wage is largely determined by the lower bound of the posted wage range.

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  • Kambayashi, Ryo & Kawaguchi, Kohei & Otani, Suguru, 2024. "Decomposing Recruitment Elasticity in Job Matching," SocArXiv wavdn, Center for Open Science.
    • Handle: RePEc:osf:socarx:wavdn
    DOI: 10.31219/osf.io/wavdn
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    More about this item

    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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