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Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

Eriksson, Stefan and Rooth, Dan-Olof LU (2014) In The American Economic Review 104(3). p.1014-1039
Abstract
The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment, we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminates this negative signal. Nor do employers treat contemporary short-term unemployment spells differently, suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects.
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author
and
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
The American Economic Review
volume
104
issue
3
pages
1014 - 1039
publisher
American Economic Association
external identifiers
  • wos:000334497800010
  • scopus:84896909772
ISSN
0002-8282
DOI
10.1257/aer.104.3.1014
language
English
LU publication?
yes
id
dc229bf9-6ffa-414d-812b-24a0989e6981 (old id 4495823)
date added to LUP
2016-04-01 13:46:22
date last changed
2025-10-14 09:05:44
@article{dc229bf9-6ffa-414d-812b-24a0989e6981,
  abstract     = {{The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment, we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminates this negative signal. Nor do employers treat contemporary short-term unemployment spells differently, suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects.}},
  author       = {{Eriksson, Stefan and Rooth, Dan-Olof}},
  issn         = {{0002-8282}},
  language     = {{eng}},
  number       = {{3}},
  pages        = {{1014--1039}},
  publisher    = {{American Economic Association}},
  series       = {{The American Economic Review}},
  title        = {{Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment}},
  url          = {{http://dx.doi.org/10.1257/aer.104.3.1014}},
  doi          = {{10.1257/aer.104.3.1014}},
  volume       = {{104}},
  year         = {{2014}},
}