The Applicant Pool Is Part of the Job
The subject of this series is not recruiting volume in the abstract. It is what happens to a particular vacancy when the number of suitable people available to apply changes. The central question is whether more applicants produce better hires—and the answer depends on what “better” means: filling the job sooner, finding a worker who stays, paying a fairer wage, or widening access to people who are less represented in the firm already. The evidence examined here supports a more demanding judgment than “more is better.”
The study behind that question follows vacancies in Austria and links them to the employment records of the workers eventually hired. It uses first-week applications referred through the Austrian public employment service as a measure of the applicant supply facing a vacancy. The sample covers regular, permanent vacancies posted from 2002 through 2019. The public employment-service board represents roughly half to three-fifths of Austrian vacancies, and the linked sample contains about 1.2 million vacancies with observed hiring outcomes. That is a large base for studying hiring, but it is still a particular labor-market setting, not a universal experiment.
The important shift is to treat the applicant pool as a condition that changes the employer’s choices. A vacancy with three suitable applicants is not simply a smaller version of a vacancy with twenty. With more people available, the firm can compare candidates, wait for a closer fit, and keep searching if the first acceptable candidate does not meet its preferred standard. With fewer, the cost of waiting rises. The employer may lower the threshold, widen the search, or hire someone who is good enough because leaving the position open is itself expensive.
That difference creates the tension at the heart of the evidence. A deeper pool can make the search more efficient: candidates arrive more readily, and the firm has a better chance of finding someone who remains in the job. But the same abundance gives the employer a stronger fallback option. If one candidate rejects the offer, another may be available. That can weaken the worker’s bargaining position. And when a firm already has a workforce dominated by one gender or nationality, a plentiful pool may make it easier to keep choosing people who resemble those already inside.
A vacancy is a constrained search
It is tempting to judge a hiring process by its most visible operational measure: how long the vacancy stays open. That measure matters. An unfilled job can delay production, burden existing employees, or cause an organization to miss an opportunity. Yet speed is only one result of selection. The worker who fills the vacancy may stay for years or leave after a few weeks; may be paid according to a productive match or according to the employer’s bargaining advantage; and may widen or reproduce the firm’s existing pattern of representation.
The Austrian study therefore follows several outcomes together. It measures the duration of the vacancy, the subsequent duration of the hired worker’s job, the starting wage, and whether the hire is female or foreign relative to the composition of the firm’s existing workforce. These outcomes do not point in the same direction automatically. A firm can fill a vacancy faster and still make a worse deal for the worker. It can find a durable match and become less open to candidates who do not resemble its incumbents. A serious answer to the title must keep those possibilities in view.
The wording around labor-market tightness also needs care. In this study, a tighter market means fewer suitable applicants per vacancy. A looser market means that applications arrive more abundantly. That convention can feel counterintuitive because “tight” is often used casually to mean intense competition. Here the relevant competition is among employers for scarce workers. When workers are scarce, a firm has less room to insist on every preference. When applicants are plentiful, the firm has more room to choose.
The first-week measure is useful for this question because it captures the supply confronting the employer early in the search. Counting all applications accumulated before a vacancy closes would blur cause and effect: a vacancy that stays open longer has more time to collect applications. The study instead asks how the early supply of candidates changes what follows. The applications are also not presented as a complete count of every person who might apply. They are an observed window into a larger pool, and that distinction becomes important when interpreting the causal estimates.
More applicants change the firm’s options
The basic mechanism can be understood without treating hiring as a contest in which the firm simply picks the highest-ranked résumé. Candidates arrive one after another, and the firm compares each person with a standard for acceptable fit. If the candidate falls below that standard, the firm continues searching. If the candidate clears it, the firm can hire. The more quickly suitable candidates arrive, the more credible it is for the employer to reject a merely adequate option and wait for a better one.
This produces two forces that pull on vacancy duration. More arrivals make it easier to encounter an acceptable candidate. Greater selectivity makes it easier to reject candidates who would have been accepted when the pool was thin. The first force shortens the search; the second can prolong it. The study’s model predicts that the vacancy will generally fill faster when the cost of keeping it open is high enough to stop the firm from waiting indefinitely. But the speed result is not a reason to forget selectivity. Faster filling and better matching can occur together when the arrival-rate advantage is strong enough.
The same logic explains why a better match need not receive a higher starting wage. A worker who fits the job well may contribute more, which creates more value to divide between the parties. That is the productivity side of the bargain. But a firm facing many applicants also has a better outside option: it can continue searching with less fear that the vacancy will remain empty. That raises the employer’s bargaining power. The value of the match may increase while the worker’s share of that value falls.
The applicant pool can also affect who is treated as acceptable. If a firm has a stable preference for hiring people who resemble its existing workforce, scarcity makes that preference costly. Rejecting an atypical candidate may mean waiting a long time for a familiar one. Abundance lowers the cost of acting on the preference. This does not mean that every applicant pool becomes more segregated or that the employer’s motive can be observed directly. It means that the firm’s ability to select can amplify an existing pattern when the pool gives it more room to do so.
The common cause is therefore not “more applications” as a magic ingredient. It is the set of options those applications create. The firm can search longer without the same penalty, compare more candidates, and negotiate from a position in which replacement is easier. Those options can improve the match and the organization’s speed while shifting economic and social consequences elsewhere.
What counts as a better hire?
The evidence makes the title useful only if “better” is treated as a set of judgments rather than a single score. For an employer trying to staff a costly vacancy, shorter time to fill and longer tenure may be valuable together. They suggest that a deeper pool can improve matching efficiency, not merely reduce the administrative effort of screening. For a worker, however, the same deeper pool may mean a lower starting wage because the employer can credibly look elsewhere. A longer-lasting job does not by itself show that the worker received a larger share of the match’s value.
The composition question is different again. A firm that hires more people like its current workforce may experience continuity, but continuity is not the same as broader access. If additional applicants make male-dominated firms less likely to hire women, or firms with few foreign workers less likely to hire foreigners, a process can look more selective while becoming less open. The study’s later analysis asks whether this pattern comes from who applies or from how employers choose among those who do. That distinction matters: changing the pool and changing the selection rule are different interventions.
This framing also prevents a common mistake in policy discussion. Increasing the effective supply of workers may help organizations fill vacancies and improve the durability of matches. It may also put downward pressure on discretionary pay and give employers more room to reproduce existing patterns. A policy that expands the pool is not automatically equivalent to a policy that improves matching. The latter might raise productivity without granting the employer every bargaining advantage associated with abundance.
The study is an IZA Discussion Paper and describes its results as preliminary work that may be revised. Its estimates are drawn from Austrian vacancies, a public-service referral measure, and a design that uses nearby mass layoffs to identify changes in applicant supply. Those choices make the evidence unusually focused on the hiring decision, but they also define its boundaries. The findings can illuminate a mechanism without establishing that the same numerical effects occur in every country, occupation, or recruitment channel.
So the opening answer is deliberately conditional. More applicants can produce a faster-filled vacancy and a hire whose employment lasts longer, in a pattern consistent with a better worker-firm match. They can also lower starting pay where employers have discretion and reinforce existing workforce divisions. To understand why these outcomes coexist, the next step is to examine the firm’s search threshold: how a changing flow of candidates alters not only whom it can find, but whom it is willing to wait for.