What You Say When You Throw an Application Away
By Bryan Caplan
[R]esearchers sent out 4,800 fake résumés at random for 600 job openings.
What they found is that employers would rather call back someone with no
relevant experience who’s only been out of work for a few months than
someone with lots of relevant experience who’s been out of work for
longer than six months.
I think of this as further illustration of what I have called ZMP workers, a once maligned concept which now is rather obviously relevant and which has plenty of evidence on its side. It’s fine if you wish to label them “perceived by employers as ZMP
workers but not really ZMP,” or “unjustly oppressed and only thus ZMP
workers.” The basic idea remains…
But is the Zero Marginal Productivity concept even relevant, much less “obviously relevant”? Put yourself in the shoes of an employer reviewing applications. What are you saying when you hastily toss an application in the trash? Consider the following possibilities:
1. “I perceive this applicant to be a ZMP worker.”
2. “I perceive this applicant to have a MVP below the wage we’re offering.”
3. “After a cursory glance at his application, I perceive this applicant to have a sufficiently high probability of having a MVP below the wage we’re offering that collecting more information is imprudent.”
My claim: #1 is a rare special case of #2, which is in turn a rare special case of #3. #3 is the generally correct story.
Why? The mere fact that you throw an application in the trash doesn’t mean you think the applicant has MVP=0. After all, even if the applicant had a high MVP, you’d still want to throw his application in the trash if his MVP<wage. Similarly, the mere fact that you throw an application in the trash doesn’t mean that you think the applicant’s MVP<wage. After all, you’d do the same if you merely thought the probability that the applicant’s MVP>wage wouldn’t justify additional search effort on your part.
Not convinced? Remember that employers often get hundreds of applications per position. 80%+ quickly end up in the trash can. Does this mean that employers think that 80%+ of applicants are ZMP? Of course not.
I readily believe that most employers hastily throw away applications from the long-term unemployed. The “obviously relevant concept,” though, is not ZMP, but statistical discrimination. Employers, like all humans, save time using true-on-average stereotypes. In the process, they inevitably overlook many diamonds in the rough. Spurning applications from the long-term unemployed is one example. Spurning applications from the uncredentialed is another. The article Tyler cites doesn’t confirm his fears about low worker productivity. It disconfirms his doubts about the signaling model of education.
P.S. If the true story is #2 or #3, why do employers treat wages as fixed? If a worker’s MVP is half the salary you’re offering, why not offer him a job at half the usual wage instead of junking his application? This is an excellent question with many well-known responses: morale, fairness, insider-outsider problems, and more. None of these answers are totally satisfying, but all of them are more satisfying than ZMP.