Productivity Signaling and Unemployment Stigma Mitigation
RCTClinical Trial
Employers frequently interpret long unemployment spells as a negative signal of worker productivity, creating hiring hesitation and barriers for registered jobseekers.
Picture this
Think of a certified inspection seal placed on a pre-owned vehicle. Buyers might hesitate to purchase a used car from an unknown seller fearing hidden defects, but a trusted mechanic inspecting and endorsing the car removes the buyer's fear and validates its quality.
What the evidence says
The intervention increased permanent contract hires of registered jobseekers by 14% (+0.046 hires per firm, p < 0.05) and stable quality hires lasting at least 12 months by 14% (+0.046 hires, p < 0.01), while producing no significant hiring increase for non-registered jobseekers.
- Who was studied
- N = 7,438 small and medium-sized enterprise establishments in France.
- How
- Stratified Randomized Controlled Trial assessing contract flows and 12-month post-hire retention on Public Employment Service registers.
What to do
Provide official public caseworker endorsements and pre-selection evaluations for long-term unemployed applicants to counteract negative employer perceptions during hiring.
From the source
"Our study shows that screening services offered by the PES are services that firms demand in part because they may alleviate the uncertainty about hiring the unemployed."
Are_Active_Labor_Market_Policies_Directed_at_Firms_Effective_Evidence.pdf