Who should we get? How employer reputation shapes network hiring in Dutch professional football

Despite a vast literature examining networks in labor markets, it remains unclear how employers differ in their use of networks during recruitment. This study examines network hiring among high and low reputation organizations in Dutch professional football. Within-employer within-transfer window fixed effects conditional logistic regression models demonstrate that networks increase the likelihood that low reputation employers hire workers, but no network effect was found among high reputation employers. Qualitative interviews with employees suggest that low reputation employers identify their search pool and gather hard-to-observe information about potential hires through networks, while high reputation employers do not rely on networks for their search pool and gather information through observing workers for prolonged periods of time     

Unauthorized workers and immigration reform: what can we ascertain from employers?

The Immigration Reform and Control Act of 1986 attempts to curb unauthorized migration by requiring employers to screen the authorizing documents of all workers. Many different documents may be used, with employers required to simply attest to the face validity of workers' documents upon an I-9 form. The authors report findings from their study estimating the unauthorized US labor force and exploring employers' initial reactions to the passage of the Immigration Reform and Control Act (IRCA) of 1986. The findings are based upon hiring practices information supplied by a sample of businesses in an evaluation of the IRCA impact. A selectivity correction model is used to impute 2.6 million unauthorized workers in the entire sample. The estimate, which compares favorably with other estimates, is tabulated by questions about IRCA. Findings suggest that a large proportion of the unauthorized labor force uses fraudulent documents, many without the knowledge of their employer. It appears that Immigration and Naturalization Service-targeted establishments hire 20% of unauthorized workers and that the employers of unauthorized workers are no more likely than other employers to believe that they can be sanctioned under IRCA. This may be associated with the apparent lack of marked change in patterns of unauthorized hiring in the period immediately following IRCA passage. There was some change in hiring behaviors in establishments hiring unauthorized workers, affecting wage offers and documentation, but US employers do not seem to perceive changes in the supply or availability of authorized workers. Study findings indicate only marginal IRCA-related changes in the characteristics of unauthorized hires during the very initial phase of IRCA's implementation. The combination of readily available fraudulent documents, the difficulty in detecting such documents, and the steady demand for low-skilled workers creates conditions which are not conducive to markedly changed hiring behavior.     

DO EMPLOYERS PAY FOR CONSISTENT PERFORMANCE?: EVIDENCE FROM THE NBA

In a world of uncertainty in which a worker's performance is variable over time and average performance is unknown when hiring, how will employers determine compensation? We develop a monitoring and signaling model where information is symmetric and parties are risk neutral. Monitoring costs increase with inconsistency, lowering pay for inconsistent workers. If discrimination exists, minority workers will be rewarded less than majority workers for improving consistency. Testing these and other predictions using National Basketball Association data, we find that consistent professional basketball players are paid more, but, in contrast to previous studies, there is no evidence of discrimination. (JEL J3, J7)     

Industry racial employment by skill level: The effects of market structure and racial wage gaps

Theories of expense preference suggest that market power gives employers the latitude to engage in employment discrimination. Additionally, labor market theory indicates that discrimination should cause a larger decline in black employment for prevalent and easily replaced low-skill workers relative to scarce, high-skill workers. Using industry-level data, we examine the relationship between worker skill level, market structure, and racial employment and we find that noncompetitive market structure reduces black employment for low-skill workers. In general, our findings indicate that market structure has less influence on the racial composition of highly trained workers relative to easily replaced low-skill workers     

Gender differences in the reemployment status of displaced workers human capital as signals that mitigate effects of bias

Data from the Current Population Survey's Displaced Workers Supplement for year 2000 indicate that after job loss, women become reemployed less frequently than do men. To explain this difference, we test sets of hypotheses derived from Human Capital and Gender Queuing theories. The results support the theory that in their hiring of displaced workers, employers tend to place men in a higher labor queue than women. Net of human capital factors, women are significantly less likely than men to be reemployed following the loss of a job. However, results also show that for women only, certain human capital characteristics substantially improve their reemployment chances. Unmarried women displaced from full-time and white-collar high-level occupations were significantly more likely to become reemployed than were women without these characteristics. The results suggest that queuing processes interact with human capital characteristics in a gender specific manner. Because employers lack perfect information about job applicants, they rely on certain human capital characteristics that signal the extent to which women in the labor market depart from prevailing negative stereotypes about women workers. To employers, unmarried women displaced from full-time managerial and professional jobs may appear more productive and committed to work than do women lacking these types of human capital. Thus, the possession of certain types of human capital among women can mitigate the effects of gender bias in the hiring of displaced labor.     

WAGE SECRECY AS A SOCIAL CONVENTION

Despite the general belie that a free flow of information enhances efficiency, social convention appears to call for secrecy regarding individuals' wages. This paper provides an explanation for this convention. We suggest that the role of wage secrecy is to reduce effective labor mobility, and thereby enhance the feasibility of risk-shifting contracts. Wage secrecy may yield a mix of mobility and risk shifting that is superior both to a spot market for labor and to a social convention that binds workers to their employers.     

Labor Market Information and Selection in a Local Restaurant Industry: The Tenuous Balance Between Rewards,Commitments, and Costs

The restaurant industry is characterized as having high turnover, skill homogeneity, and distrust of standard sources of labor market information. We examine how in this context employers seek and evaluate information on potential job candidates (extensive search) and the hiring criteria they use to select new employees (intensive search). We find that employers in the restaurant sector are often passive or reactive about recruitment, distrust standard sources of information, and reject the use of educational credentials and work experience as hiring criteria. They do, however, find ways to signal workplace information to potential job candidates, develop schemes to gather reliable information, and closely evaluate job history data when hiring. Some develop signaling strategies to alert potential employees that their stores are sufficiently different from apparently similar stores to make them unusually attractive places to work. To help secure a sufficiently motivated work force, managers eschew standard measures of potential productive capacity or skills and adopt instead indicators of a modicum of employee motivation. Even under conditions of high turnover, skill homogeneity, and distrusted information, employers find ways to secure effort and commitment from potentially recalcitrant employees.     

The emergence of employer information networks in an experimental labor market

We use laboratory experiments to investigate whether employer networks emerge that facilitate information sharing about the trustworthiness of job candidates. The design allows us to distinguish between mechanisms underlying the relations among employers and those between employers and workers. One type of network we observe is an ‘anonymity network’ where information is anonymously and voluntarily provided as a collective good for all employers to use. The other type is a ‘reciprocity network’ where information sharing is driven by the rewarding of previously given information by the requestor. Recruitment through these networks leads to higher earnings for both employers and workers.     

LABOR MARKET EFFECTS OF EMPLOYER-PROVIDED HEALTH INSURANCE

This is an experimental study in economics of mandated benefits. Most individuals who have health insurance in the United States obtain it through their employer. Some states require employers to provide insurance to certain types of workers. We used an experimental laboratory to investigate possible effects of alternative health insurance regulations on the competitive labor market performance. We found that mandating the insurance for all workers creates labor market distortions, whereas mandating the insurance only for full-time workers leads to a higher coverage than under no mandate, an increased number of part-time workers, but does not necessarily lower market efficiency. ( JEL C92, I18, J2)     

On the Job: White Employers,Workers of Color,and Racial Triangulation Theory

This article offers that Claire Jean Kim's theory of racial triangulation provides an ideal framework to study workers of color, the racialization of their labor and the ways in which actual and potential employers neglect and discriminate against these workers. Specifically, the piece determines that racial triangulation theory bolsters analysis of race‐based power that employers exert in the construction and maintenance of racial inequality in regard to management of labor and employment possibilities for workers of color. A triangulated approach allows for a sharp focus on employer engineered labor market inequality as they oversee, hire, and refuse to be racially inclusive in hiring practices. Most significantly, racial triangulation theory addresses the forces of racial inequity within the meso‐level of U.S. social structure when applied to study of organizational dynamics such as workplaces. I open the article by assaying historical and contemporary studies on workers of color to illustrate white employer domination and the ways in which workers of color are referenced to each other as inferior and superior workers. Subsequently, the article looks to fresh analytical directions in which sociologists can evaluate racism as a triangulated, multidimensional social force in the workplace and other social contexts.     

FIRM SPECIFIC HUMAN CAPITAL AS AN EMPLOYER DISCIPLINE DEVICE

The inability of employers to monitor perfectly the level of effort of their employees is a potentially serious impediment to labor market efficacy. Indeed, a number of recent studies have concluded that this may lead to involuntary unemployment (Shapiro and Stiglitz [1984], Sparks [1986]); an inefficient sectoral allocation of workers (Oi [1990], Strand [1986]); and discrimination against productively identical workers (Bulow and Summers [1986]). This paper shows that the lock-in effect of firm-specific human capital can help alleviate problems of worker moral hazard and thereby promote labor market performance.     

The Impact of Labor Market Structure on Sex Differences in Earnings

This research examines how structural features of a labor market affect the size of the male-female earnings differential in that market. Theoretical predictions are tested using data on the earnings of male and female academics in the US. Measures of labor market structure are shown to be significantly associated with the size of the earnings differential in 56 labor markets corresponding to specific academic disciplines. As predicted, an oversupply of labor within a market and greater career embeddedness in a single organization within a market increased the size of the earnings gap between men and women. Contrary to predictions, greater flows of information in the market and market permeability had no impact on the size of the earnings differential within markets. In addition, higher percentages of women in the market decreased the wage differential within markets. Additional analysis at the individual level found that men were penalized less than women when labor market conditions led to lower wages. Findings generally support the theoretical position that structural characteristics of the labor market affect the ability of employers to engage in salary discrimination against women.     

Employer Incentives for Providing Informal On-the-job Training in the Presence of On-the-job Search

We analyze the provision of informal general training in a frictional labor market in which employers cannot commit to training levels and workers cannot commit to stay. We demonstrate that employers’ training decisions are driven by both an investment motive, to improve productivity, and a compensation motive, to increase employee retention. The investment motive decreases with higher wages, while the compensation motive increases. In our calibration exercises, the former dominates, which creates a negative relationship between wages and training. Furthermore, in contrast to recent studies missing the compensation motive, lessening the search frictions raises overall training levels due to enhanced compensation motives, approaching Becker’s result for a frictionless labor market.     

Quality upgrading and restrictive hiring practices in unionized jobs

Most previous work has suggested that unionized employers upgrade labor quality of new hires, but has been silent on the behavior of unions when they control hiring. In this paper, it is argued that unions also have the incentive to upgrade quality, but to an extent less than or equal to upgrading by employers. Empirical support for this argument is provided using data from the National Longitudinal Surveys of young men and young women, in conjunction with an industry measure of union control over hiring. Years of schooling and worker IQ measure labor quality. The author may be contacted at 9271-B Jamison Avenue, Philadelphia, PA 19115. She thanks her dissertation committee members Masanori Hashimoto, Patricia Reagan, and especially Donald Parsons, for their detailed comments, and seminar participants at the Ohio State University for helpful suggestions on previous drafts.     

Employment and Sexual Orientation:

Economist, sociologists, and other social scientists have begun to study the influence of sexual orientation on individuals in the labor market, particularly with respect to employment discrimination. The conceptual framework developed in this paper connects lesbian, gay, and bixexual workers' disclosure of their sexual orientation to the economic and social characteristics of the workplace. Disclosure creates the potential for discrimination by employers and coworkers. The framework shows how sexual orientation operates independently and in interaction with other important characteristics such as race and gender. A review of existing research supports the hypothesis that discrimination against gay workers exists. Both workplace groups for gays and lesbians and those who work gay and lesbian workers (such as supervisors, personnel managers, and counselors) need to understand the relationship between disclosure and discrimination in order to make workplaces supportive of lesbian, gay, and bisexual workers.     

Low wages and high unemployment rates: The role of social interactions in hiring discrimination

The purpose of this paper is to explain why low-wage workers with identical qualifications to higher-wage workers are more exposed to unemployment. Each worker is considered to belong to a social group (defined according to his/her gender, age, and nationality). We assume that workers experience both productive interdependencies and social interactions within the firm. Also inter- and intra-group interactions determine worker productivity, and frictions on the labor market limit the hiring of the most productive workers. Consequently, externalities acting both within the firm and in the labor market can lead to a higher rate of unemployment for low-wage workers.     

Local Produce,Foreign Labor: Labor Mobility Programs and Global Trade Competitiveness in Canada*

Abstract Temporary visa workers are increasingly taking on a heightened profile in Canada, entering the workforce each year in greater numbers than immigrant workers with labor mobility rights (Sharma 2006). This paper examines the incorporation of foreign workers in Canadian horticulture under the Seasonal Agricultural Workers Program (SAWP). I argue that foreign labor supplied under the SAWP secures a flexible workforce for employers and thus improves Canada's trade competitiveness in the global agrifood market. Using multiple research strategies, I track the evolution of Canadian horticulture in the global market and the transformation of labor in this industry. I outline the steady growth in the employment of temporary visa workers in the horticultural industry and show how they have become the preferred and, in some cases, core workforce for horticulture operations. The benefits of SAWP workers to employers include the provision of a workforce with limited rights relative to domestic workers and considerable administrative support in selecting, dispatching, and disciplining workers provided at no cost by labor supply countries. I conclude that the SAWP is a noteworthy example of the role of immigration policy in regulating the labor markets of high‐income economies and thus ensuring the position of labor‐receiving states within the global political economy.     

Devolution of employment and training policy: the case of older workers

The case for the devolution of employment and training programs has traditionally been based on the supply side argument that state and local governments are in the best position to assess the training needs of their disadvantaged workers. We provide a different perspective by focusing on the demand side of the labor market and the link between aiding older workers and fostering economic growth. We illustrate the importance of this focus by examining the labor market in Massachusetts, where the full employment economy of the late 1990s resulted in serious labor supply bottlenecks. Older workers, whose ranks are growing rapidly, provide the largest known labor reserve for meeting these labor supply deficits in the next decade. Tapping this reserve, however, means improving skills, deferring retirement, bringing older persons back into the labor market, and increasing full-time employment. Massachusetts already has the policy tools needed to train older workers to fill emerging job needs, but these policies will need to be substantially upgraded and reoriented. Too little funding, an emphasis on short-term programs, lack of coordination among programs, weak linkages to the private sector, and the limited flexibility of human resources practices in both the private and public sectors have left both government programs and employers ill-prepared to utilize fully the older worker labor reserve.     

EMPLOYERS' USE OF JOB HISTORY DATA FOR MAKING HIRING DECISIONS:

Most research on occupational assignment has concentrated on characteristics of job seekers that presumable signal positive labor market information to employers. Foremost among these have been educational credentials and years and type of work experience. In many cases, though, employers seek indicators that can provide them with negative information about a candidate's prospects for successful job performance; they frequently construct screens that enable them to easily disqualify candidates. Case studies of six Chicago organizations identified six components of "job history data' used by many employers to screen out otherwise acceptable candidates: job hopping, absences from work, latenesses to work, periods of unfilled time, reasons for leaving past employers, and past wage rates. One or more of these items are often consequential in employer hiring decisions. The implications of these findings for a more detailed understanding of status attainment and job assignment are discussed, as well as how research in this area might proceed.     

LABOR MARKET PERFORMANCE EFFECTS OF DISCRIMINATION AND LOSS OF SKILL

We examine the impact of discrimination on labor market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment to increase in the other sector and the effect on labor market performance therefore depends on whether discrimination is present in only one sector or in both. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon in which sector there is discrimination. Net output tends to be most negatively affected by discrimination among high‐skilled workers. (JEL J15, J31, J61, J64, J71)