The Establishment-Level Behavior of Vacancies and Hiring,NBER Working Paper

Search models are widely applied to the study of unemployment, worker turnover, wage dispersion and other labor market phenomena. These models afford a central role to the concept of a job vacancy, but most of the evidence on vacancies is confined to aggregate outcomes. In contrast, we study vacancies, hires and vacancy yields (success rates in generating hires) at the establishment level using the BLS Job Openings and Labor Turnover Survey, a large representative sample of U.S. employers. We show that the vacancy yield moves counter cyclically but rises with employer growth in the cross section. We also develop a stock-flow accounting framework that identifies the average job-filling rate for vacant positions, the monthly flow of new vacancies, and the fraction of hires outside of this basic framework. The job-filling rate is counter cyclical, increases steeply with establishment turnover and rises sharply with employer growth in the cross section. Our results also suggest that at between 16 and 22 percent of hires occur without a prior vacancy, as recorded in JOLTS. We argue that these findings raise several issues for the treatment of vacancy data and worker recruitment in models of labor market search