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.”
Employers and lawmakers have speculated that enhanced unemployment benefits have given people less of a reason to take a job. President Biden in March approved $300 in extra federal benefits each week to unemployed workers until September. — Niklas Engbom, assistant professor at New York University Stern School of Business But a new paper looking at job hunting after a recession has another — perhaps more controversial — theory, described by its author as “contagious unemployment.”
“During periods of high unemployment, it consequently becomes harder for firms to assert who is a good fit for the job,” he added. “By raising the cost of recruiting, a short-lived adverse shock has a persistent negative impact on the job finding rate.” Writing in the Harvard Business Review, Peter Cappelli, the George W. Taylor professor of management at the Wharton School and a director of its Center for Human Resources, advises companies to track the percentage of openings filled from within and require that all openings be posted internally.
wow