Original source
Are Active Labor Market Policies Directed at Firms Effective? Evidence from a Randomized Evaluation with Local Employment Agencies
Dated research draft · Version date: 19 January 2020
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BMO Recruitment Intent Survey Stratification
"The sample was stratified by indicators for the agency to which the firm was administratively attached, if the firm had intended to recruit in 2014 and by the number of employees on the firm's payroll..."
Candidate Pre-Screening and Filtering Services
"In line with the implementation of these types of services, we find that treatment firms receive significantly less applicants for final review, that they expend significantly less effort themselves in generating applicants and that their vacancies are significantly more likely to be filled by counselor-made matches over an 8-week period."
Candidate Valorization and Immersion Evaluation
"This included 'Valorization' in which counselors put special effort into highlighting specific jobseeker attributes that might be unobservable to, or overlooked by the employer. This could also include an 'evaluation' service whereby the candidate is evaluated through a simulation or immersion in the firm before the decision to hire is made."
Counselor Match Conversion Efficiency
"Their vacancies are significantly more likely to be filled by counselor-made matches over an 8-week period."
Counselor Match Survival Velocity
"We see that treatment and control survival rates diverge in the very first day of vacancy creation with the difference continuing to diverge over the observation period. We can formally reject the null of equality of the survival functions using a Cox regression based test with a p-value of 0.02."
Demand-Side Active Labor Market Policies
"In this paper, we explore the effectiveness and potential limitations of a symmetric intervention that assists firms in their recruitment operations in a slack labor market."
Double Post-Lasso High-Dimensional Covariate Selection
"To select covariates, we implement the double post lasso developed in Belloni et al. (2014) in order to avoid the risk of specification search... There is almost no impact of adding the additional covariates either on the estimated coefficients or on their standard errors."
Dual-Friction Market Tightness Invariance
"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."
Dual-Market Screening Frictions
"Firms have trouble generating candidates for their vacancies 'when times are good' as benchmark theory would predict, but also when times are bad due to the number of applications they receive when opening a position."
Equilibrium Displacement Externalities
"For each hire in a treated firm the real increase in the total workforce in the market will be only 0.68. This suggests that even with a marginal intervention equilibrium effects can matter."
Firm-Directed Active Labor Market Policy
"We show that this shock led to a 24% increase in open-ended vacancy postings with the PES that translated into a 10% increase in permanent contract hires for registered jobseekers, on average over a six-month treatment period."
Intermediary Familiarity Premium
"In contrast we find that employment creation is completely centered on firms that were previously in contact with the PES. We find average treatment effects very close to zero for firms which were not formerly in contact with PES counselors. But for firms which were, we detect large significant effects: +0.124 hires of registered jobseekers in permanent contracts and we reject the null of equal impacts (p-value of 2.1%)."
Low-Productivity Cost Offsets
"This evidence conforms to the idea that the drop in vacancy costs allowed treatment firms to create less productive jobs... compensated by the drop in the recruitment cost."
Micro-Market Priority Targeting Algorithm
"We created a priority ranking of professions per agency based on local-level tightness and job finding probabilities weighted by the stock of jobseekers registered in the agency. Using a profession-sector correspondence table, we then merged these 'priority professions' to sectors."
Commute-Zone Micro-Market Tightness Granularity
"We calculate tightness again at the micro-market level (commute-zone x sector) to obtain a more granular indicator of the labor market conditions faced by sample firms at the beginning of the intervention."
Extreme Value Top-Coding Truncation Protocol
"Finally, we top-code all administrative data at the 99th percentile of their distribution in order to make sure our linear estimates are not driven by a few, very large recruiting firms."
Prerequisite Criteria Pre-Selection
"Special criteria involves working with the employer to establish a maximum of 1-5 prerequisites, on which to select candidates that are not necessarily observable in the vacancy posting... Coefficient and control mean indicates that treated firms are much more likely to receive this service for their vacancies, +122%."
Reinforced Pre-Screening and Filtering Services
"With 'verification' the PES counselor could recommend that firms choose to have applicants apply only through the counselor by making the vacancy private (not publicly available online). Or, if publicly posted, jobseekers could only see the brand or chain name and thus cannot contact the recruiter directly, thus shifting the pre-screening responsibility entirely to the counselor."
Private Vacancy Access Control
"Importantly, implementation of verification implies that counselors take control of how firms receive applications. For instance, they can make the vacancy private so that it is not publicly available on the internet, only in agencies."
Private Vacancy Filtering
"With 'verification' the PES counselor could recommend that firms choose to have applicants apply only through the counselor by making the vacancy private (not publicly available online)... We see that treatment increases the proportion of vacancies that were made private by 57%..."
Proactive Firm Prospection Campaign
"Counselors in the 129 participating local employment agencies intensively prospected treatment firms for 3 months starting on September 15th, 2014 while the control group was 'sanctuarized' until March 31, 2015..."
Probationary Trial Period Screening
"A trial period or période d'essai, typically lasts 1-3 months for permanent contracts in France in which either side can unilaterally end the contract without consequence... This provides evidence that the program helped firms hire workers that made it past the formal trial period."
Productivity Signaling and Unemployment Stigma Mitigation
"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."
Randomization Inference Permutation Testing
"Following Young (2018), we implement randomization inference for the usual student test, using 10,000 permutations tests. This allows to obtain a consistent estimate of the exact p-value of our test."
Short-Term Contract Variance Dilution
"For example, roughly 53% of all flows concern fixed or temp contracts of a week or less. Not surprisingly, the standard deviation of hires over all contracts is 9.9 times as large as that of permanent contracts. This obviously inhibits our ability to detect a significant effect on overall hiring as the impact on permanent contract hires is diluted."
Spontaneous Candidature Promotion
"These spontaneous candidate promotions are defined as a counselor presenting a résumé to an employer in absence of a declared hiring need or vacancy."
Theoretical Workday Standardization
"This 'theoretical number of workdays' allows us to have a standardized measure of employment creation... calculating workdays allows us to compare the overall theoretical employment creation within and across contract types."
Three-Channel Search Effort Disaggregation
"These data are novel in that they provide a measure of search effort put forth by each of the three actors."
Transitory Vacancy Posting Decay
"Figure 4a shows positive and significant effects during the sanctuary period (15 Sep. - 31 Dec. 2014), but we see also they progressively decline starting May 2015... Although standard errors are large, these results indicate that treatment firms posted relatively less vacancies than control firms after the sanctuary period."
Vacancy Drafting and Legal Compliance Support
"French law requires that vacancies do not discriminate on the basis of demographic characteristics such as gender or race and that they contain adequate job descriptions: a baseline salary offer, skill requirements and working times and hours."
Within-Firm Spillover Dilution Control
"We thus exclude firms that had multiple branches included in the experiment due to the possibility of within-company spillover effects that would dilute treatment effects. Our final sample comprises 7,438 unique firms."