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The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices

The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices

Chapter:
(p.235) 7 The Effects of a Centralized Clearinghouse on Job Placement, Wages, and Hiring Practices
Source:
Studies of Labor Market Intermediation
Author(s):
Muriel NiederleAlvin E. Roth
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226032900.003.0008

This chapter discusses the effects of centralized clearinghouses on hiring practices, namely the timing of the market, and the kinds of offers that are made. It also discusses its effect on employment opportunities, job placement, and potential impact on salaries. The market for gastroenterology fellows provides a case study of market failure and of the ways in which centralized clearinghouses can sometimes fix them. It appears that labor markets and other heterogeneous markets can suffer from congestion, which can in turn lead to strategic behavior that can result in lack of thickness and add risk to straightforward participation in the market. Professional organizations can sometimes play a useful intermediary role in establishing and maintaining such institutions. More research is needed to try to understand how labor markets work in detail, so that we can better understand when they work well, and can fix them when they are broken.

Keywords:   clearinghouse, job placement, wages, gastroenterology, labor markets

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