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Giuliano Bonoli (Univ of Lausanne)

21 April 2016 @ 14:00


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21 April 2016
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“The signaling value of labor market programs”


This paper investigates how employers interpret participation in active labor market programs for hiring decisions. Drawing on signaling theory, we assume that employers use program participation as a signal for a candidate’s qualities. On the basis of a factorial survey experiment, we simulated a hiring process for two job positions in the hotel sector. Recruiters were asked to evaluate fictional candidates that differ, among other characteristics, in their participation in active labor market programs. Our results show that employers do use participation in labor market programs as a signal. Its impact can be positive as well as negative, depending on the type of job that is applied for. For low-skill positions, the impact is more positive than for mid-skilled ones. We also show that the signal “participation in a labor market program” interacts with education and, to a lesser extent, nationality. In general the signal is positive for the most disadvantaged candidates (low skilled and immigrants), and neutral/negative for less disadvantaged ones.