The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices
NBER Working Paper No. 13529
Issued in October 2007
NBER Program(s): HE LS
New gastroenterologists participated in a labor market clearinghouse (a "match") from 1986 through the late 1990's, after which the match was abandoned. This provides an opportunity to study the effects of a match, by observing the differences in the outcomes and organization of the market when a match was operating, and when it was not.
After the GI match ended, the market unraveled. Contracts were signed earlier each year, at diffuse times, often with exploding offers. The market became less national, more local. This allows us to discern the effect of the clearinghouse: it coordinated the timing of the market, in a way that increased its thickness and scope. The clearinghouse does not seem to have had an effect on wages.
As this became known among gastroenterologists, an opportunity arose to reorganize the market to once again use a centralized clearinghouse. However it proved necessary to adopt policies that would allow employers to safely delay hiring and coordinate on using the clearinghouse.
The market for gastroenterologists provides a case study of market failures, the way a centralized clearinghouse can fix them, and the effects on market outcomes. In the conclusion we discuss aspects of the experience of the gastroenterology labor market that seem to generalize fairly widely.
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Published: The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices, Muriel Niederle, Alvin E. Roth, in Studies of Labor Market Intermediation (2009), University of Chicago Press
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This paper was revised on September 5, 2008
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