ºÃÉ«App

I construct a structural model of recruitment choice in which employers select recruitment strategies with the knowledge that some strategies are more likely than others to generate high-quality matches. The model can be used to analyze the implications of alternative recruitment strategies for vacancy duration, placement rates for different worker groups, the distribution of starting wages, the quality of the resulting worker-job matches and employer profits. Various government policies seek to enhance the labor market outcomes of particular worker groups by altering the incentives and information available to employers. The effects of such policies can only be inferred in the context of a model that accounts for the changes in employers' recruiting and hiring behavior in response to the policy. I estimate the parameters of the structural model using data from the Multi-City Study of Urban Inequality (MCSUI), a 1992-1995 cross-sectional survey of employers and households in 4 metropolitan areas. I then conduct policy simulations to predict the effects of "information" policies such as the Workforce Investment Act of 1998 and "hiring incentive" policies such as the Welfare-to-Work and Work Opportunity tax credits. I find that the tax credits are superior to the information policy, both in improving placement rates for the low-skilled worker groups they target, and in increasing the starting wage distribution for these workers.