Labor Demand on a Tight Leash

[2203.05593] Labor Demand on a Tight Leash Skip to main content Search Submit Donate Log in Search arXiv Press Enter to search · Advanced search Economics > General Economics arXiv:2203.05593 (econ) [Submitted on 10 Mar 2022 ( v1 ), last revised 8 Apr 2026 (this version, v8)] Title: Labor Demand on a Tight Leash Authors: Mario Bossler , Martin Popp View a PDF of the paper titled Labor Demand on a Tight Leash, by Mario Bossler and 1 other authors View PDF Abstract: We develop a labor demand model that encompasses pre-match hiring cost arising from tight labor markets. Through the lens of the model, we study the effect of labor market tightness on firms' labor demand by applying novel shift-share instruments to the universe of German firms. In line with theory, we find that a doubling in tightness reduces firms' employment by 5 percent. Taking into account the resulting search externalities, the wage elasticity of firms' labor demand reduces from -0.7 to -0.5 through reallocation effects. In light of our results, pre-match hiring cost amount to 40 percent of annual wage payments. Subjects: General Economics (econ.GN) Cite as: arXiv:2203.05593 [econ.GN] (or arXiv:2203.05593v8 [econ.GN] for this version) https://doi.org/10.48550/arXiv.2203.05593 Focus to learn more arXiv-issued DOI via DataCite Related DOI : https://doi.org/10.1177/00197939261435961 Focus to learn more DOI(s) linking to related resources Submission history From: Martin Popp [ view email ] [v1] Thu, 10 Mar 2022 19:09:40 UTC (80 KB) [v2] Wed, 13 Apr 2022 15:52:17 UTC (81 KB) [v3] Tue, 19 Jul 2022 09:00:16 UTC (81 KB) [v4] Wed, 11 Jan 2023 10:22:46 UTC (102 KB) [v5] Thu, 12 Jan 2023 12:45:52 UTC (102 KB) [v6] Fri, 3 Feb 2023 10:28:20 UTC (102 KB) [v7] Thu, 29 Feb 2024 22:29:21 UTC (6,168 KB) [v8] Wed, 8 Apr 2026 19:03:03 UTC (6,169 KB) Full-text links: Access Paper: View a PDF of the paper titled Labor Demand on a Tight Leash, by Mario Bossler and 1 other authors View PDF TeX Source view license Current browse context: econ.GN < prev | next > new | recent | 2022-03 Change to browse by: econ q-fin q-fin.EC References & Citations NASA ADS Google Scholar Semantic Scholar export BibTeX citation Loading... BibTeX formatted citation × loading... Data provided by: Bookmark Bibliographic Tools Bibliographic and Citation Tools Bibliographic Explorer Toggle Bibliographic Explorer ( What is the Explorer? ) Connected Papers Toggle Connected Papers ( What is Connected Papers? ) Litmaps Toggle Litmaps ( What is Litmaps? ) scite.ai Toggle scite Smart Citations ( What are Smart Citations? ) Code, Data, Media Code, Data and Media Associated with this Article alphaXiv Toggle alphaXiv ( What is alphaXiv? ) Links to Code Toggle CatalyzeX Code Finder for Papers ( What is CatalyzeX? ) DagsHub Toggle DagsHub ( What is DagsHub? ) GotitPub Toggle Gotit.pub ( What is GotitPub? ) Huggingface Toggle Hugging Face ( What is Huggingface? ) ScienceCast Toggle ScienceCast ( What is ScienceCast? ) Demos Demos Replicate Toggle Replicate ( What is Replicate? ) Spaces Toggle Hugging Face Spaces ( What is Spaces? ) Spaces Toggle TXYZ.AI ( What is TXYZ.AI? ) Related Papers Recommenders and Search Tools Link to Influence Flower Influence Flower ( What are Influence Flowers? ) Core recommender toggle CORE Recommender ( What is CORE? ) Author Venue Institution Topic About arXivLabs arXivLabs: experimental projects with community collaborators arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website. Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them. Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs . Which authors of this paper are endorsers? | Disable MathJax ( What is MathJax? ) We gratefully acknowledge support from our major funders , member institutions , , and all contributors. About · Help · Contact · Subscribe · Copyright · Privacy · Accessibility · Operational Status (opens in new tab) Major funding support from

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