Abstract: I develop a directed search model of the labor market in which firms choose a recruiting intensity, determining the number of applicants they will interview. Interviewing applicants is costly but reveals their productivity, allowing the firm to hire better workers. I characterize the equilibrium and find that the uniqueness and cyclicality of recruiting intensity crucially depend on parameter values. Calibration of the model to the US labor market indicates a multiplicity of the equilibrium. An increase in aggregate productivity---given selection of a particular equilibrium---causes recruiting intensity to move counter to unemployment, while a shock to the equilibrium selection rule predicts the opposite pattern.
Keywords: labor market, search, frictions, recruiting, efficiency
JEL Classification: J64; E24