’Contagious unemployment’ — a controversial theory why companies have difficulty hiring workers

Companies are struggling to find recruits, and economists, lawmakers and businesses big and small are wondering why. The latest hypothesis, proposed in a new working paper, is “contagious unemployment.”

“ ‘During periods of high unemployment, it consequently becomes harder for firms to assert who is a good fit for the job.’ ” “Unemployed workers send over 10 times as many job applications in a month as their employed peers, but are less than half as likely per application to make a move,” he wrote. “I interpret these patterns as the unemployed applying for more jobs that they are less likely to be a good fit for.”

He wrote, “Firms may worry that such fees would particularly discourage poor but suitable candidates from applying,” later adding, “scam firms would have an incentive to charge fees but never hire, such that no worker would be willing to apply to a job that required a fee.”

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