Vacancy Posting Research Articles

Labor market dynamics with sorting

I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase disproportionately. Firms respond by posting additional vacancies, and the strength of the response is increasing in firm productivity. The distribution of unemployment worker types adjusts slowly, which amplifies job creation in the short run. In the long run, falling unemployment curtails the firms' vacancy posting. The model closely matches time-series moments from U.S. labor market data and produces realistic degrees of wage dispersion and labor market sorting.

Russia–Ukraine war: A note on short-run production and labour market effects of the energy crisis

We provide first causal evidence of effects of the energy crisis on Germany, the largest economy in Europe. Combining cost structure data, national accounts and administrative labour market data, we identify effects in a sectoral panel setting using sector-specific energy intensity as a “bite” variable. The results show that through the channel of energy intensity, monthly production and real turnover decreased by 4.1 and 2.6 per cent, respectively, after the onset of the Russia–Ukraine war. Instead of layoffs, firms safeguarded employment by means of short-time work, with a 24.1 per cent increase in notifications. Vacancy posting was reduced by 10.3 per cent.

Effects of stay-at-home orders on skill requirements in vacancy postings

The COVID-19 pandemic and containment policies have had profound economic impacts on the labor market. Stay-at-home orders (SAHOs) implemented across most of the United States changed the way of people worked. In this paper, we quantify the effect of SAHO durations on skill demands to study how firms adjust labor demand within occupation. We use skill requirement information from the 2018 to 2021 online job vacancy posting data from Burning Glass Technologies, exploit the spatial variations in the SAHO duration, and use instrumental variables to correct for the endogeneity in the policy duration related to local social and economic factors. We find that policy durations have persistent impacts on the labor demand after restrictions are lifted. Longer SAHOs motivate management style transformation from people-oriented to operation-oriented by requiring more of operational and administrative skills and less of personality and people management skills to carry out standard workflows. SAHOs also change the focus of interpersonal skill demands from specific customer services to general communication such as social and writing skills. SAHOs more thoroughly affect occupations with partial work-from-home capacity. The evidence suggests SAHOs change management structure and communication in firms.

Vacancy posting, firm balance sheets, and pandemic policy

Vacancy posting, firm balance sheets, and pandemic policy

The Effect of COVID-19 Pandemic on Labour Demand and Search Behavior: Evidence from a job search webpage in Costa Rica and Google Data

This paper presents estimates of how the pandemic of COVID-19 and the lockdown policies implemented in Costa Rica to contain its spread affected the firm’s decision to post vacancies and workers search behavior, using data from the online job advertisement webpage buscoempleocr. Differences in Differences estimates suggest a drop of 67.2% in the inflow of vacancies posted by firms before and after the policies were implemented, relative to previous year. Results by industry states that Accommodation and Food Services, reported the highest decline in vacancy posting. By occupations, the reduction in vacancy posting was more severe for the groups of service and sales workers and elementary occupations. By location, the most affected provinces are those that i) are characterized by their touristic industries and ii) are main cities where industries are concentrated. Regarding the labor supply, there is an increase in the number of job seekers, however their search intensity might have declined during the pandemic.

THE MINIMUM WAGE AND OCCUPATIONAL MOBILITY

AbstractThis article quantifies the effect of minimum wages on workers' occupational mobility. I show that minimum wages decrease younger, less‐educated workers' occupational mobility and are associated with more mismatch. A search‐and‐matching model highlights two channels by which the minimum wage decreases occupational mobility. First, it compresses wages and reduces the gain from switching, leading to lower occupational mobility and more mismatch. Second, it decreases vacancy posting. Calibrating the model to the U.S. economy, the results suggest that a 15 dollar minimum wage can damp aggregate output by 0.4%, of which the wage compression channel accounts for 80%.

Recruiting intensity and hiring practices: Cross-sectional and time-series evidence

Using the German IAB Job Vacancy Survey, we look into the black box of recruiting intensity and hiring practices from the employers’ perspective. Our paper evaluates three important channels for hiring —namely vacancy posting, the selectivity of hiring (labor selection), and the number of search channels— through the lens of an undirected search model. Vacancy posting and labor selection show a U-shape over the employment growth distribution. The number of search channels is also upward sloping for growing establishments, but relatively flat for shrinking establishments. We argue that growing establishments react to positive establishment-specific productivity shocks by using all three channels more actively. Furthermore, we connect the fact that shrinking establishments post more vacancies and are less selective than those with a constant workforce to churn triggered by employment-to-employment transitions. In line with our theoretical framework, all three hiring margins are procyclical over the business cycle.

Recruiting Intensity and Hiring Practices: Cross-Sectional and Time-Series Evidence

Using the German IAB Job Vacancy Survey, we look into the black box of recruiting intensity and hiring practices from the employers' perspective. Our paper evaluates three important channels for hiring —namely vacancy posting, the selectivity of hiring (labor selection), and the number of search channels— through the lens of an undirected search model. Vacancy posting and labor selection show a U-shape over the employment growth distribution. The number of search channels is also upward sloping for growing establishments, but relatively flat for shrinking establishments. We argue that growing establishments react to positive establishment-specific productivity shocks by using all three channels more actively. Furthermore, we connect the fact that shrinking establishments post more vacancies and are less selective than those with a constant workforce to churn triggered by employment-to-employment transitions. In line with our theoretical framework, all three hiring margins are procyclical over the business cycle.

Recruiting Intensity and Hiring Practices: Cross-Sectional and Time-Series Evidence

Using the German IAB Job Vacancy Survey, we look into the black box of recruiting intensity and hiring practices from the employers' perspective. Our paper evaluates three important channels for hiring —namely vacancy posting, the selectivity of hiring (labor selection), and the number of search channels— through the lens of an undirected search model. Vacancy posting and labor selection show a U-shape over the employment growth distribution. The number of search channels is also upward sloping for growing establishments, but relatively flat for shrinking establishments. We argue that growing establishments react to positive establishment-specific productivity shocks by using all three channels more actively. Furthermore, we connect the fact that shrinking establishments post more vacancies and are less selective than those with a constant workforce to churn triggered by employment-to-employment transitions. In line with our theoretical framework, all three hiring margins are procyclical over the business cycle.

Labor Demand During the COVID-19 Crisis in Norway: Evidence From Vacancy Posting Data

We use the vacancy posting data from the Norwegian Labour and Welfare Administration (NAV) job database to study the impact of Covid-19 crisis on labor demand in Norway. We find that in response to the Covid-19 pandemic, the vacancy posting from late February to the end of June in 2020 declined by around 27% relative to the same period in 2019. There are some weak sign of recovery in May and June but the number is still lower than that of the same period last year. The deterioration in labor demand is rather broad. The vacancy postings collapsed around the same time in all counties in Norway. Almost all industry and occupations experienced sizable drops, regardless whether they are considered to be feasible to be performed remotely. Around 80% of the collapse in job creation can be due to the hiring freezes at the firm level.

Vacancies, Employment Outcomes and Firm Growth: Evidence from Denmark

We use comprehensive data from Denmark that combine online job advertisements with a matched employer-employee dataset and a firm-level dataset with information on revenues and value added to study the relationship between vacancy-posting and various firm outcomes. Posting a vacancy is associated with a 4.5 percentage point increase in a firm's hiring rate and two-thirds of the additional hiring occurs within two months. The response of hiring from employment is twice as large as the response of hiring from non-employment. Firms that are smaller, low-wage and fast-growing are associated with larger hiring responses and that response materializes faster at larger firms, low-wage firms and fast-growing firms. We also find that separations are associated with subsequent vacancy posting and this effect is stronger for separations to employment, consistent with replacement hiring and the presence of vacancy chains. Growth in revenue and value added strongly predict vacancy-posting, with negative shocks having a stronger effect than positive shocks and larger shocks having less-than-proportional responses.

Unemployment Cycles

The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks. We propose a theory in which the search behavior of the employed has profound aggregate implications for the unemployed. There is a strategic complementarity between active on-the-job search and vacancy posting by firms, which leads to multiple equilibria: in the presence of sorting, active on-the-job search improves the quality of the pool of searchers. This encourages vacancy posting, which in turn makes costly on-thejob search more attractive—a self-fulfilling equilibrium. The model provides a rationale for the Jobless Recovery, the outward shift of the Beveridge curve during the boom and for pro-cyclical frictional wage dispersion. Central to the model’s mechanism is the fact that the employed crowd out the unemployed when on-the-job search picks up during recovery. We also illustrate this mechanism in a stylized calibration exercise. (JEL E24, E32, J63, J64)

The Unemployment Volatility and Wage Inertia Puzzles: The Centrality of Vacancy Posting Costs (to Output)

The Unemployment Volatility and Wage Inertia Puzzles: The Centrality of Vacancy Posting Costs (to Output)

Economic policy uncertainty spillovers in small open economies: The case of Hong Kong

AbstractThis paper studies the extent to which economic policy uncertainty shocks in major economies affect real economic activity in small open economies. We use Hong Kong as a case study. Following Baker, Bloom and Davis (2016), we construct a newspaper‐based economic policy uncertainty index for Hong Kong for the period 1998 to 2016. We estimate international spillovers of uncertainty and find large spillovers of uncertainty from major economies to Hong Kong. Furthermore, using a structural vector autoregressive approach, we show that a rise in domestic economic policy uncertainty leads to tight financial conditions, and lower investment and vacancy posting, dampening domestic output growth.

Vacancy Posting, Employee Value, and Asset Pricing

Expectations of returns and cash flows are linked to firms' labor search decisions. Using a dataset that covers the near-universe of online job vacancy postings, I show that vacancy rates negatively predict returns and positively predict cash flows in the cross-section of firms and industries. The predictive power of vacancy postings is strengthened for firms facing less favorable labor-market conditions. Incorporating the supply and demand information of the aggregate labor market, I construct a new measure of employment value that strongly predicts aggregate stock and bond market returns, even in the presence of other known predictors.

A Cautionary Note on the Help Wanted Online Data

Measuring labor demand is one of the crucial tasks in analyzing the labor market. In the case of the United States, two main data sources geared towards this objective are the Job Openings and Labor Turnover Survey (JOLTS), administered by the Bureau of Labor Statistics, and the Conference Board Help Wanted Online series (HWOL). In this note we exploit the timing of Craigslist price increases by metropolitan area (MSA) to find their effect on online vacancy posting.

Downward wage rigidity and business cycle asymmetries

The growth rates of wages, unemployment and output of a number of OECD countries have a strongly skewed distribution. In this paper we analyze to what extent downward wage rigidities can explain these empirical business cycle asymmetries. To this aim, we introduce asymmetric wage adjustment costs in a New-Keynesian DSGE model with search and matching frictions in the labor market. Increasing wages is less costly than cutting them. It follows that wages increase relatively fast and thus limit vacancy posting and employment creation, but they decline more slowly, leading to a strong reduction in vacancies and employment. The presence of downward wage rigidities strongly improves the fit of the model to the observed skewness of labor market variables and the relative length of expansions and contractions in the output and the employment cycles. The asymmetry also explains the differing transmission of positive and negative monetary policy shocks from wages to inflation.

Optimal income taxation with Kalai wage bargaining and endogenous participation

This paper characterizes the optimal redistributive tax schedule in a search–matching framework where (voluntary) nonparticipation and (involuntary) unemployment are endogenous and wages are determined by proportional bargaining a la Kalai. The optimal employment tax rate is given by an inverse elasticity rule. This rule depends on the global response of the employment rate, which depends not only on the participation (labor supply) responses, but also on the vacancy posting (labor demand) responses and on the product of these two responses. For plausible values of the parameters, our matching environment induces much lower employment tax rates than the usual competitive model with endogenous participation only. However, optimal employment tax rates are larger (in absolute value) when a given level of the global elasticity of employment is more due to search frictions and less due to participation responses.

Household Leverage and Fiscal Multipliers

We study the size of fiscal multipliers in response to a government spending shock under different household leverage conditions in a general equilibrium setting with search and matching frictions. We allow for different levels of household indebtedness by changing the intensive margin of borrowing (loan-to-value ratio), as well as the extensive margin, defined as the number of borrowers over total population.The interaction between the consumption decisions of agents with limited access to credit and the process of wage bargaining and vacancy posting delivers two main results: higher initial leverage makes it more likely to find output multipliers higher than one; and a positive government expenditure shock always produces a positive multiplier for vacancies and employment. The latter result is in sharp contrast to models in which some households do not have access to the financial market (RoT consumers), in which the implied labor market responses to fiscal shocks are inconsistent with the empirical evidence. We also find that the impact on GDP of consolidations is lower when consumers have a more limited capacity to borrow, and that increasing government spending in an episode of intense private deleveraging can still generate positive and significant effects on consumption and output, although the fiscal output (employment) multiplier decreases (increases) with the intensity of the credit crunch. In the model with indebted impatient households we also observe that output (employment) multipliers decrease (increase) markedly with the degree of shock persistence and increase with the degree of price stickiness.

Optimal Redistributive Taxation with Both Labor Supply and Labor Demand Responses

This paper characterizes the optimal redistributive tax schedule in a matching unemployment framework with endogenous (voluntary) nonparticipation and (involuntary) unemployment. The optimal employment tax rate is given by an inverse employment elasticity rule. This rule depends on the global response of the employment rate, which depends not only on the participation (labor supply) responses, but also on the vacancy posting (labor demand) responses and on the product of these two types of responses. For plausible parameters, our matching environment induces much lower employment tax rates than the usual competitive participation model.