ABSTRACT
This chapter explores the effects of variation in recruitment and selection strategies on the productivity of the firm's workforce. It describes the empirical specification of the model and discusses the results of the analysis. The productivity of a firm's workforce is determined by the interaction of the workers and the capital used in the production process. A firm's organizational recruitment and selection efforts are among the factors hypothesized to influence labor productivity through their effects on labor quality. These factors are captured using measures of employer extensive and intensive search. Measures of extensive search are the number of interviews conducted per hire (IPERH), and the number of recruiting sources used regularly to generate applicants (SOURCES). Labor productivity rises with the number of selection tests the firm administers to prospective employees. In other words, there are real gains to the employer who searches more intensively for information about the expected value of labor services among individuals in the available labor market.
