Screening with Multitasking

85 Pages Posted: 28 Jul 2022

Multiple version iconThere are 3 versions of this paper

Date Written: July 26, 2022

Abstract

What happens when employers would like to screen their employees but only observe a subset of output? We specify a model in which heterogeneous employees respond by producing more of the observed output at the expense of the unobserved output. Though this substitution distorts output in the short-term, we derive three sufficient conditions under which the heterogenous response improves screening efficiency: 1) all employees place similar value on staying in their current role; 2) the employees' utility functions satisfy a variation of the traditional single-crossing condition; 3) employer and worker preferences over output are similar. We then assess these predictions empirically by studying a change to teacher tenure policy in New York City, which increased the role that a single measure – test score value-added – played in tenure decisions. We show that in response to the policy teachers increased test score value-added and decreased output that did not enter the tenure decision. The increase in test score value-added was largest for the teachers with more ability to improve students' untargeted outcomes, increasing their likelihood of getting tenure. We find that the endogenous response to the policy announcement reduced the screening efficiency gap – defined as the reduction of screening efficiency stemming from the partial observability of output – by 28%, effectively shifting some of the cost of partial observability from the post-tenure period to the pre-tenure period.

Suggested Citation

Dinerstein, Michael and Opper, Isaac, Screening with Multitasking (July 26, 2022). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2022-100, Available at SSRN: https://ssrn.com/abstract=4174482 or http://dx.doi.org/10.2139/ssrn.4174482

Michael Dinerstein (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

HOME PAGE: http://https://sites.google.com/site/michaeldinerstein/

Isaac Opper

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

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