Events at CERGE-EI

Daphné Skandalis

CREST, Paris, France

Author: Daphné Skandalis

Abstract: Recent studies suggest that the existence of a posted job vacancy provides a relatively weak signal on firms’ actual hiring needs. For job seekers, this translates into substantial uncertainty about their probability of being hired when they apply to an existing vacancy. In this paper I study how job seekers react to media news that a plant intends to expand hiring in the near future—information that job seekers can potentially use to distinguish real from “phantom” vacancies. I exploit a new source of job search activity derived from a large public online search platform in France, combined with administrative data on actual hiring outcomes. I can link 612 news with this data at the plant level and estimate their impact on applications sent to the plants mentioned in news and subsequent hiring. My empirical strategy exploits the quasi-random timing of news in the short run. Consistent with the view that job seekers are trying to learn about real job openings, I estimate that news of a plant expansion leads to 60% increase in job applications over the next month. Job seekers who apply in reaction to the news tend to live relatively far away, and appear to be good matches for the plant’s needs. Job seekers as a whole benefit from news events by being able to direct their search towards plants that actually intend to hire, though I find some evidence of displacement effects, concentrated among local job seekers. Overall, my findings suggest that low-cost interventions providing information about hiring needs could improve the job matching process and increase geographical mobility.

Full Text:  “Breaking News: Information About Firms’ Hiring Needs Affects the Direction of Job Search”