We conduct a survey experiment on hiring decisions in the Swiss hotel sector, comprising a population of about 5.000 hotel directors and HR managers in all regions of Switzerland, which were asked to evaluate the hireability of hypothetical candidates. Based on a conjoint analysis, we are able to identify two mechanisms that influence a respondent's evaluation: first, individual signals or characteristics that indicate disadvantage and discrimination, such as nationality, gender and age. Second, the welfare benefit history of a person. Depending on the type and amount of active labour market policy (ALMP) participation(s) employers are more or less likely to hire the candidates.
The labor market exclusion of certain groups of welfare beneficiaries might be explained by the fact that employers cannot observe the employees productivity directly when hiring staff and hence resort to using ALMP participation as an additional indicator or signal for a candidate's productivity.
The results suggest that employers in the hotel sector rely on both individual-level characteristics and on institutionally assigned benefit types when choosing among different candidates. This research has implications for public policy making since participation in ALMP may negatively affect welfare beneficiaries rather than enhance their situation on the labour market.
