Matching with interviews

This paper explores how interviews affect the matching process when worker productivity is private information. Wages are determined by a single round of strategic bargaining after the worker is interviewed. The implications of this hiring process for the efficiency of matching and the incidence and severity of statistical discrimination are considered. The better are firms at identifying productive workers the worse the average quality of the unemployment pool so interviewing tends to slow down matching for every one. Multiple Pareto rankable equilibria are possible such that any social group in a “bad” equilibrium faces stricter hiring standards, longer spells of unemployment and lower welfare.