Hunting for Talent: Firm-Driven Labor Market Search in the United States

Abstract

We analyze firm-driven labor market search, where firms “hunt” for talent rather than rely on workers to apply for vacancies. We leverage three approaches. We develop a model of firm-driven search and derive equilibrium conditions under which firms use this channel. We test our model's predictions using two data sources. Data from a nationally representative survey of 10,000 workers shows that the percentage hired through recruiting has increased from 4.9% in 1991 to 14.3% in 2022. This share is larger for higher-skilled workers and those with online profiles on LinkedIn. We complement this analysis with data on the near universe of online job postings from 2010 through 2020. Consistent with our model and worker survey evidence, we find firms that demand higher-skilled workers or operate in labor markets with heavy LinkedIn use are more likely to “hunt for talent.”