Macro Recruiting Intensity from Micro Data
We merge QCEW and JOLTS microdata to study the recruiting intensity of firms in the cross-section and over time. We show that vast establishment-level heterogeneity in vacancy filling rates is entirely explained by differences in gross hiring rates. We provide theory that supports these empirical facts and, through the lens of this theory, combine firm-level decisions and data into an empirical measure of Aggregate Recruiting Intensity (ARI). We show that procyclicality of ARI is primarily due to reductions of recruiting effort in slack labor markets. Jointly, these results inform a proxy ARI index that is easily computable from publicly available macroeconomic time series. Fluctuations in ARI account for around 40% of the volatility of overall aggregate match efficiency from 2002 to 2019.
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