R. Jason Faberman, Bureau of Labor Statistics

Models of labor market search 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, often treating vacancies as an essential and costly input into the worker recruitment process. Yet, the empirical evidence thus far has been limited to aggregate measures of the vacancy rate. We detail micro-level vacancy behavior using establishment data from the new BLS Job Openings and Labor Turnover Survey. We focus on hires, vacancies and the vacancy yield (i.e., the success of a vacancy in generating a hire) and document tremendous heterogeneity in their behavior across industries and at the micro-level. We find the vacancy yield to be countercyclical and nonlinearly increasing in establishment growth. To identify some of the underlying, unobserved factors influencing vacancy posting and worker recruitment, we develop a simple yet flexible stock-flow model that can identify the behavior of the job-filling rate, the flow of vacancies, and the incidence of hires that occur without active recruiting. Our model implies that the job-filling rate is countercyclical and has considerable cross-sectional variation. It also suggests that at least one-third of all hires occur without a vacancy posting. These findings raise a variety of questions about the standard approaches to modeling vacancies and worker recruitment, yet our approach may also aid in resolving several empirical puzzles in the labor search literature