Universität zu Köln

Butschek, Sebastian (2019). Essays on the selectiveness of firms' hiring: determinants and measurement. PhD thesis, Universität zu Köln.

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Abstract

Chapter 1 investigates whether the introduction of a statutory minimum wage in Germany raised hiring standards. The difference-in-differences analysis exploits variation in employers' pre-reform wage structure. I proxy realized hiring standards by establishments' minimum hire quality, using worker fixed effects estimated before the analysis period as a measure of both observed and unobserved ability. I find that the minimum wage increased minimum hire quality by 18.9% of a standard deviation. Using pre-reform survey information I show that the effect is increasing in the importance of screening to the establishment's hiring process, strengthening its interpretation as a change in hiring standards. Chapter 2 estimates the causal effect of employment protection on firms' worker selection. We study a policy change that reduced dismissal costs for small Swedish firms. Our difference-in-differences analysis of firms' hiring uses individual ability measures including estimated worker fixed effects and cognitive test scores. We find that the reform reduced minimum hire quality by 5% of a standard deviation, half of which we can attribute to firms' hiring becoming less selective. Our results help discriminate between existing theories, supporting the prediction that firms shift their hiring standards in response to changes in dismissal costs. Chapter 3 assesses the performance of estimated AKM worker effects as an ability proxy. Using Swedish register data, we study the correlation between AKM estimates and cognitive test scores from the military draft. We find a correlation of roughly .4, more than three quarters of machine-learning algorithms' predictive performance. However, we find that the worker effects' prediction performance varies with observed worker and firm characteristics. Our analyses show that the worker effects "contain" both skill-related and non-skill attributes while broadly supporting the estimation choices of existing applications.

Item Type:	Thesis (PhD thesis)
Creators:	Creators Email ORCID ORCID Put Code Butschek, Sebastian UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-112987
Date:	2019
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Faculty of Management, Economics and Social Sciences > Business Administration > Corporate Development > Professorship for Business Administration and Human Resources Management
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language worker selection, hiring standard, screening, labor-labor substitution, minimum wage, employment protection, dismissal cost, cognitive ability, test score, unobserved productivity English
Date of oral exam:	9 September 2019
Referee:	Name Academic Title Sliwka, Dirk Prof. Dr. Lindqvist, Erik Prof. Dr. Hirsch, Boris Prof. Dr.
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/11298