Search, Screening, and Sorting by Cai, Gautier, and Wolthoff in the American Economic Journal: Macroeconomics
The paper title 'Search, Screening, and Sorting,' co-authored by research fellow Pieter Gautier (Vrije Universiteit) and Tinbergen Institute alumni Xiaoming Cai (Peking University HSBC Business School, China) and Ronald Wolthoff (University of Toronto, Canada) has been published in the American Economic Journal: Macroeconomics.
Abstract
We examine how search frictions impact labor market sorting by constructing a model consistent with evidence that employers interview a subset of a pool of applicants. We derive necessary and sufficient conditions for sorting in applications and matches. Positive sorting is obtained when production complementarities outweigh a counterforce measured by a (novel) quality-quantity elasticity. Interestingly, the threshold for the complementarities depends on the fraction of high-type workers and can be increasing in the number of interviews. Our model shows how policies like Ban the Box can backfire because when screening workers becomes harder, firms may discourage certain workers from applying.
Article citation
Cai, Xiaoming, Pieter Gautier, and Ronald Wolthoff. 2025. "Search, Screening, and Sorting." American Economic Journal: Macroeconomics 17 (3): 205–36, doi.org/10.1257/mac.20240026.