Sick and Tell: A Field Experiment Analyzing the Effects of an Illness-Related Employment Gap on the Callback Rate

Using a résumé-based correspondence test, we compare the employment consequences of an illness-related employment gap to those of an unexplained employment gap. Previous research shows that employment gaps, in general, have adverse effects on the probability of getting hired. It is not clear, however, if employers view spells of joblessness due to health issues distinctly. To shed light on this, we present a theoretical model in which employers use information on employment gaps as a signal of unobserved productivity and healthcare costs. We investigate the empirical implications of the model by sending three types of fictitious résumés to real job vacancies. One résumé indicates that the applicant is newly unemployed. The other résumés indicate employment gaps which are either unexplained or explained as being related to an illness. To signal an illness-related employment gap, a phrase in the cover letter explained that the employment gap was due to a physical illness followed by a full recovery. An additional signal on medical history was sent via information in the résumé that indicates involvement in a cancer recovery support group. The corresponding cover letters of the résumés with unexplained gaps did not provide any explanation for the gap. For the résumé of newly unemployed applicants, the length of the gap is limited to less than two months. Based on the literature, this is too short a gap to bring about adverse effects. The corresponding cover letter of newly unemployed applicants notes that the applicant left the last job because her family had to move from another state and that she is currently looking for a new job. From March to September, 2016, we sent 3,771 résumés to 1,257 sales, administrative, and accounting assistant jobs. Outcomes are measured in terms of differences in the callback rate of each type of résumé. The results of the experiment show that newly unemployed applicants had the highest callback rate (27.4%). Consistent with previous studies, résumés with an employment gap received lower callback rates, indicating that such gaps negatively affect hiring outcomes. However, résumés with an explained illness-related gap received a higher callback rate than résumés with an unexplained gap (25.6% versus 23.3%). Within the context of our theoretical model, these results suggest that the negative productivity signal of an unexplained gap outweighs undesirable factors associated with poor health history.