The Signal of Applying for a Job Under a Vacancy Referral Scheme

44 Pages Posted: 2 Jul 2018

See all articles by Eva Van Belle

Eva Van Belle

Ghent University - Department of Social Economics

Ralf Caers

KU Leuven

Marijke De Couck

Vrije Universiteit Brussel (VUB)

Valentina Di Stasio

University of Oxford

Stijn Baert

Ghent University; University of Antwerp; Catholic University of Louvain (UCL); Institute for the Study of Labor (IZA)

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Abstract

Persistent unemployment across OECD countries has led to increasing investments in activation programmes and, as a consequence, rigorous evaluations of the effectiveness of these programmes. The results of these evaluations have been mixed at best. To improve the effectiveness of the activation programmes, it is important to know why we observe these unsatisfactory results. One possible explanation that has been largely underexplored is the signal these programmes send to prospective employers. We investigate this signalling effect in the context of a job-vacancy referral system. To this end, we conduct a state-of-the-art vignette experiment in which HR professionals make hiring decisions concerning fictitious job candidates who apply either under a job-vacancy referral system or directly (without referral). By analysing the experimental data, we provide first causal evidence for a substantial adverse effect of referral on the probability of being hired. In addition, our experimental design allows us to explore whether this effect is heterogeneous by job candidate and recruiter characteristics and what exactly is signalled by the job-vacancy referral. In particular, we find that employers perceive referred candidates as being less motivated than other candidates.

Keywords: signalling, activation policies, job referral, policy evaluation, unemployment

JEL Classification: J68, J23, C91

Suggested Citation

Van Belle, Eva and Caers, Ralf and De Couck, Marijke and Di Stasio, Valentina and Baert, Stijn, The Signal of Applying for a Job Under a Vacancy Referral Scheme. IZA Discussion Paper No. 11577. Available at SSRN: https://ssrn.com/abstract=3205844

Eva Van Belle (Contact Author)

Ghent University - Department of Social Economics ( email )

Hoveniersberg 24
Gent, 9000
Belgium

Ralf Caers

KU Leuven ( email )

Oude Markt 13
Leuven, 3000
Belgium

Marijke De Couck

Vrije Universiteit Brussel (VUB) ( email )

Pleinlaan 2
http://www.vub.ac.be/
Brussels, 1050
Belgium

Valentina Di Stasio

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Stijn Baert

Ghent University ( email )

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

HOME PAGE: http://https://www.uantwerpen.be/nl/personeel/stijn-baert/

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://www.uclouvain.be/en-309318.html

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=6832

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