Dual-Friction Market Tightness Invariance
RCTClinical Trial
Traditional economic policy assumes firm-directed recruitment assistance is ineffective during economic downturns when candidate supply is abundant and firms face minimal candidate-generating frictions.
Picture this
Imagine a restaurant facing two different bottlenecks: in a busy town, management struggles because few people apply for jobs, whereas in a quiet town, management struggles because hundreds apply and reviewing every resume takes too long. Screening assistance helps management in both situations by solving opposite sides of the same operational delay.
What the evidence says
The treatment impact on permanent vacancy creation with pre-screening services was statistically equivalent between low-tightness markets (+0.033) and high-tightness markets (+0.061) with a p-value for equal treatment effect of 0.386.
- Who was studied
- N = 7,438 firms across French commute-zone micro-markets categorized by baseline labor market tightness (median tightness = 0.35).
- How
- Stratified Randomized Controlled Trial evaluating treatment effect heterogeneity across low (below-median) and high (above-median) labor market tightness sub-samples.
What to do
Deploy firm recruitment assistance programs continuously across both recessionary and expansionary macroeconomic cycles, switching service focus from candidate generation to applicant filtering.
From the source
"This implies that pre-screening services may be effective in reducing 'candidate generating costs' when candidates are hard to come by, but also reduce the screening costs associated with large flows of applications when there are many jobseekers and relatively few jobs."
Are_Active_Labor_Market_Policies_Directed_at_Firms_Effective_Evidence.pdf