DP14004 Macro Recruiting Intensity from Micro Data

Author(s):	Simon Mongey, Giovanni L. Violante
Publication Date:	September 2019
Keyword(s):	Aggregate Matching Efficiency, Firm Heterogeneity, Recruiting Intensity, unemployment, Vacancies
JEL(s):
Programme Areas:	Labour Economics, Monetary Economics and Fluctuations
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=14004

We merge QCEW and JOLTS microdata to study the recruiting intensity of firms in the cross section and over time. Vast establishment-level heterogeneity in vacancy filling rates is entirely explained by differences in gross hiring rates. Through the lens of standard theory, we aggregate firm-level decisions into an measure of aggregate recruiting intensity (ARI). Procyclicality of ARI is primarily due to cutting recruiting effort in slack labor markets. Given this we provide an ARI index easily computable from publicly available macroeconomic data. Declining ARI in the Great Recession accounted for much of the increase in unemployment, but little of its persistence.