Measuring Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process

This study refines recruitment elasticity measurement by focusing on realized matches rather than applications and by conditioning on worker–vacancy pairs for which posted wages are observed. Using data from Japan’s largest job-matching intermediary that tracks full recruitment processes, we find elasticities near one for upper-wage workers but insignificant elasticities for lower-wage workers, while little variation across employment types are found. Elasticities are higher in small firms and in competitive occupations. Because both sides’ outside options matter, controlling for choice sets is essential. Posted wages mainly influence the application stage, suggesting that applicationsreliably approximate matches in estimating recruitment elasticity.