More Choices or Help Choosing?: Experimental Evidence on Helping Firms Hire

Abstract

Broadly, there are two main ways to help employers hire: (a) expand their choice set by attracting more applicants or (b) help them choose among that choice set. I report the results of an experiment where employers in a large online labor market were given hiring assista nce that could take either form, based on the determina tion of the helper. In general, job openings with few applicants were given recruiting help, while applicants with many applicants were given selection help. All were given general advice on the hiring process. I find that employers of treated job posts were over 10% more likely to make a hire than those in the control group. While increased recruiting can potentially crowd-out other matches, I find that little if any of the experimental increase was coming at the expense of the control group. In decomposing the reasons for the increased hiring, I find evidence that both (a) and (b) were important, but with recruiting help being about three times more important than selection help. Despite assistance having a marginal cost, the hiring assistance was remarkably cost-effective and a central planner that could tax the wage bill at even just 2% could fund the intervention.