Employers in the Boom: How Did the Hiring of Less-Skilled Workers Change during the 1990s?

Abstract

Employers became more willing to hire a range of disadvantaged workers during the 1990s boom—including minorities, workers with certain stigmas (such as welfare recipients), and those without recent experience or high school diplomas. The wages paid to newly hired less-skilled workers also increased. On the other hand, employers' demand for specific skill certification rose over time, as did their use of certain screens. The results suggest that the tight labor markets of the late 1990s, in conjunction with other secular changes, raised hiring costs and induced employers to shift toward screens that seemed more cost-effective.