Vacancy Competition Non-Congestion
Active labor market interventions that increase application rates for targeted jobseekers risk creating negative spillovers by crowding out non-targeted candidates or congesting employer hiring workflows without increasing overall hiring.
Picture this
Imagine a restaurant with ten open tables and only two dining parties present. If a promotion brings eight more parties to the restaurant, everyone gets seated and served without taking a table away from existing diners. Crowding only happens when all tables are full; when capacity is underutilized, adding participants creates no conflict.
What the evidence says
Shifting a jobseeker from the 25th to the 75th percentile of exposure to treated competitors changed control group interview probability by +0.006 percentage points (p = 0.589) and treated group probability by -0.011 percentage points (p = 0.511).
- Who
- N = 1,116,446 jobseeker-vacancy matches across 1,340 employer vacancies in Lahore, Pakistan.
- How
- Cluster-randomized spillover analysis evaluating variation in vacancy-level treatment exposure rates across an interquartile range of [0.43, 0.52].
What to do
Scale job application encouragement programs across matching platforms without restricting participation out of concern for applicant crowd-out when platform vacancy fill rates remain well below capacity.
From the source
"Estimates of spillover effects are small and not statistically significant... taking these factors together, it is possible that firms in this labor market receive too few suitable applications in the absence of treatment for crowd-out to be relevant."
Why_Don’t_Jobseekers_Search_More_Barriers_and_Returns_to_Search.pdf