Scandinavian Working Papers in Economics

Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

No 09-6: Vacancy Duration, Wage Offers, and Job Requirements - Pre-Match Data Evidence

Longhwa Chen and Tor Eriksson ()
Additional contact information
Longhwa Chen: Aletheia University, Postal: Tainan, Taiwan
Tor Eriksson: Department of Economics, Aarhus School of Business, Postal: Frichshuset Hermodsvej 22, 8230 Åbyhøj, Denmark

Abstract: Besides wage offers, credentials like education, work experience and skill requirements are key screening tools for firms in their recruitment of new employees. This paper contributes some new evidence to a relatively tiny literature on firms’ recruitment behaviour. In particular, our analysis is concerned with how vacancy durations vary with firms’ minimum wage offers and minimum job requirements (regarding education, skills, age, gender and earlier work experience). The empirical analysis is based on ten employer surveys carried out by the DGBAS on Taiwan during the period 1996-2006. We estimate logistic discrete hazard models with a rich set of job and firm characteristics as explanatory variables. The results show that vacancies associated with higher wage offers take, ceteris paribus, longer to be filled. The impact of firms’ wage offers and credential requirements does not vary over the business cycle. However, firms vary their skills requirements over the business cycle: our empirical analysis shows that, for a given wage offer, requirements are stricter in recessions and downturns. Separating between reasons for posting vacancies turned out important in explaining differences in vacancy durations. The duration of vacancies due to regular turnover and changing business cycle condition are less affected by skill requirements than that of other vacant jobs.

Keywords: Job vacancies; Recruitment; Wage offers; Job requirements

JEL-codes: J32; J33; M12

51 pages, May 15, 2009

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