Hiring Procedures in the Firm: Their Economic Determinants and Outcomes

47 Pages Posted: 15 Jan 2007

See all articles by Harry J. Holzer

Harry J. Holzer

Georgetown University - Public Policy Institute (GPPI); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: March 1987

Abstract

This paper presents an economic analysis of recruitment and screening procedures chosen by firms as they hire new workers. After reviewing the relevant literature within the labor economics and human resources fields, I outline an employer search model in which firms choose hiring procedures as well as reservation productivity levels. The outcomes determined by these choices (e-g., expected vacancy durations, expected worker productivity and characteristics, and total resources devoted to hiring) are considered as well. I then present some empirical evidence on the determinants and outcomes of hiring procedures from a survey of firms. Among other things, the results show some evidence of higher productivity and lower turnover among those hired through referrals from current employees. Total time spent on hiring when using these referrals is also shown to be lower than when other methods are used. However, those hired through these referrals are less likely to be young or female than are those hired through other methods. The implications of these findings for "efficiency" and "equity" considerations are then discussed.

Suggested Citation

Holzer, Harry J., Hiring Procedures in the Firm: Their Economic Determinants and Outcomes (March 1987). NBER Working Paper No. w2185. Available at SSRN: https://ssrn.com/abstract=346987

Harry J. Holzer (Contact Author)

Georgetown University - Public Policy Institute (GPPI) ( email )

3600 N Street, NW Suite 200
Washington, DC 20057
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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

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