Chapter

The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices

Muriel Niederle and Alvin E. Roth

in Studies of Labor Market Intermediation

Published by University of Chicago Press

Published in print December 2009 | ISBN: 9780226032887
Published online February 2013 | e-ISBN: 9780226032900 | DOI: http://dx.doi.org/10.7208/chicago/9780226032900.003.0008
The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices

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This chapter discusses the effects of centralized clearinghouses on hiring practices, namely the timing of the market, and the kinds of offers that are made. It also discusses its effect on employment opportunities, job placement, and potential impact on salaries. The market for gastroenterology fellows provides a case study of market failure and of the ways in which centralized clearinghouses can sometimes fix them. It appears that labor markets and other heterogeneous markets can suffer from congestion, which can in turn lead to strategic behavior that can result in lack of thickness and add risk to straightforward participation in the market. Professional organizations can sometimes play a useful intermediary role in establishing and maintaining such institutions. More research is needed to try to understand how labor markets work in detail, so that we can better understand when they work well, and can fix them when they are broken.

Keywords: clearinghouse; job placement; wages; gastroenterology; labor markets

Chapter.  17323 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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