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https://hdl.handle.net/2142/20650
Description
Title
Employer search and employee quality
Author(s)
Sicilian, Paul
Issue Date
1991
Doctoral Committee Chair(s)
Kahn, Lawrence M.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Labor
Language
eng
Abstract
Recent research on labor markets has focused on the ability of the firm to influence the productivity of its employees. While most of this research has concentrated on the structure of the compensation package the employer can offer its employees, there has also been interest in the employer's labor market search strategy. Existing studies have attempted to identify the determinants of employer search. This thesis, on the other hand, attempts to measure the effects of employer search on the quality of the firm's employees.
Using data from the Employment Opportunities Pilot Project (EOPP), the thesis creates several measures of employer search effort. The search variables are consistent with the notions of extensive and intensive search and formal and informal information networks first suggested by Rees (1966). The thesis first investigates the impact of employer search strategy on employee turnover behavior using Probit regression analysis. The results, while mixed, indicate that employer search has important effects on the employment stability of the firm's employees. Moreover, the results imply that Rees' distinction between formal and informal information networks is relevant and important, both for the determination of the optimal search strategy and for the effects of search strategy on employee turnover.
Next, an empirical model of employer search and employee quality is developed. This model is estimated using OLS and Instrumental Variable techniques. Employee quality is measured by standard human capital variables and by subjective employee productivity scores which are found in the EOPP. The results of this procedure are more equivocal. While the distinction between the type of information network used remains important, the effects of employer search effort on employee quality is less clear. Employer search effort is found to be statistically insignificant in many regressions. These results indicate that further theoretical and empirical work on the determinants and effects of employer search is needed.
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