Duration dependence and discrimination in the youth labour market : experimental evidence from the decision-making of Italian employers

Abstract

The International Labour Organization estimates that there will be 52 million jobs missing in 2022 and an additional 21 million people in unemployment compared to the pre-pandemic period. Women and those with an immigrant background will be adversely affected. These workers already faced a higher risk of losing jobs before the COVID-19 outbreak. The question then is whether, during the recovery, women and those with an immigrant background will also take longer to find a job than men and native workers. Longer job search entails increasing time in unemployment and employers may be less likely to consider hiring someone with extended periods of joblessness. Thus, longer unemployment duration might become an additional liability for women and workers with an immigrant background when looking for jobs. Research has documented the negative effect of unemployment duration on employment prospects, namely duration dependence, but some studies show this relationship might be spurious. Further, research on discrimination looked at the differential impact of unemployment duration based on gender or immigrant background but rarely investigated their intersection. This thesis, therefore, looks at the relationship between duration dependence and discrimination. It assesses how employers utilize unemployment duration, gender, and immigrant background, and their intersection in hiring processes. Using a correspondence study, 4,079 resumes were sent to 1,041 Italian employers who posted online vacancies between September 2019 and May 2020. Responses to these resumes show that duration dependence and discrimination are independent phenomena: unemployment duration is not more detrimental for any group of job seekers. Discrimination stems from employers’ bias and whether employers use gender to sort applicants depends on the immigrant background. Nonetheless, who gets discriminated against varies with job quality and the formalization of the hiring process. Overall, results suggest that Italian employers help push women and those with an immigrant background toward low-quality jobs.