The Wrong Man for the Job: Biased Beliefs and Job Mismatching

GATE - Working Paper 1705, February 2017

30 Pages Posted: 6 Feb 2017

See all articles by Valeria Maggian

Valeria Maggian

Ca Foscari University of Venice - Dipartimento di Economia

Antonio Nicolò

University of Padua - Department of Economics; University of Manchester

Date Written: February 6, 2017

Abstract

In this paper we build a theoretical model to show the role of self-confidence in leading to inefficient job matching equilibria: under-confident highly-qualified workers do not apply for highly-skilled jobs, because mistakenly perceive themselves as having relatively lower abilities with respect to other candidates, and firms are no longer selecting their workers from a pool containing the best fitted ones. Policies to foster under-confident workers to apply for highly-skilled jobs cannot easily be implemented, because under-confidence is not an observable characteristic, and any attempt to elicit this information from workers can be easily manipulated. However, if gender is correlated with this psychological bias, and there more under-confident female workers than male workers, a second best policy based on gender affirmative action may enhance the efficiency of matching in the job market. We show that increasing the gender diversity of the qualified applicants by imposing an affirmative action may positively affect the selection of candidates because it increases the average quality of the pool of candidates for high-qualified jobs.

Keywords: Gender gap, Labor market, Self-confidence, Affirmative action

JEL Classification: D03, D83, J16, J24

Suggested Citation

Maggian, Valeria and Nicolò, Antonio, The Wrong Man for the Job: Biased Beliefs and Job Mismatching (February 6, 2017). GATE - Working Paper 1705, February 2017, Available at SSRN: https://ssrn.com/abstract=2912128

Valeria Maggian (Contact Author)

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy
+39 041 234 9150 (Phone)

Antonio Nicolò

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy

University of Manchester ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

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