Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

32 Pages Posted: 31 Dec 2011  

Stefan Eriksson

Uppsala University - Department of Economics

Dan-Olof Rooth

University of Kalmar; IZA Institute of Labor Economics

Abstract

In this paper, we use unique data from a field experiment in the Swedish labor market to investigate how past and contemporary unemployment affect a young worker's probability of being invited to a job interview. In contrast to studies using registry/survey data, we have complete control over the information available to the employers and there is no scope for unobserved heterogeneity. We find no evidence that recruiting employers use information about past unemployment to sort workers, but some evidence that they use contemporary unemployment to sort workers. The fact that employers do not seem to use past unemployment as a sorting criterion suggests that the scarring effects of unemployment may not be as severe as has been indicated by previous studies.

Keywords: scarring, unemployment, field experiment

JEL Classification: J64

Suggested Citation

Eriksson, Stefan and Rooth, Dan-Olof, Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment. IZA Discussion Paper No. 6235. Available at SSRN: https://ssrn.com/abstract=1977821

Stefan Eriksson (Contact Author)

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden
+46 18 471 1132 (Phone)
+46 18 471 1478 (Fax)

Dan-Olof Rooth

University of Kalmar ( email )

Sweden

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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