Hiring Difficulties and Firms' Growth

Micro Seminar
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Maddalena Ronchi

Friday 27 Jan 2023, 15:30 - 16:45
Langeveld building
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This paper studies the effect of hiring difficulties on firms' outcomes. We use a shift-share identification strategy combining occupation-specific changes in the probability and time-to-fill job vacancies within a local labor market (the shifts) and variation across firms in their pre-sampled occupation mix (the shares).

joint with Thomas Le Barbanchon and Julien Sauvagnat

We show that hiring frictions have negative effects on firms' employment, sales, and profits. Firms partially adjust to hiring frictions by increasing the wages and retention rate of incumbent workers, and by lowering their hiring standards. We then document larger effects of hiring frictions for labor-intensive firms, firms in expanding sectors, and for non-routine cognitive, high-skill, high-wage, and job-specific occupations. Taken together, our findings indicate that hiring frictions are an important determinant of the growth and profitability of firms across time and space.

Maddalena Ronchi smiling

About Maddalena Ronchi

Maddalena is a post-doctoral fellow at the Institute for Fiscal Studies in London and a Research Affiliate at IZA. She will join the Department of Economics of the University of Zurich as an Assistant Professor in September 2023. 

Research interests

Her research interests lie in labor economics with a focus on gender inequalities, personnel economics, and labor & finance.


If you would like to schedule a bilateral, join lunch or dinner on Friday evening, please send an email to boring@ese.eur.nl.

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