Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms
We use novel data from a leading online job search platform to examine the impact of corporate distress on firms’ ability to attract job applicants. Survey responses suggest that job seekers accurately perceive firms’ financial condition, as measured by companies’ credit default swap prices and accounting data. Analyzing responses to job postings by major financial firms during the Great Recession, we find that an increase in an employer’s distress results in fewer and lower quality applicants. These effects are particularly evident when the social safety net provides workers with weak protection against unemployment and for positions requiring a college education.
This paper was revised on May 27, 2015
Document Object Identifier (DOI): 10.3386/w18208
Published: Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms Jennifer Brown Northwestern University - Kellogg School of Management David A. Matsa Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER) January 24, 2013
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