Understanding how employers evaluate non-employed applicants is crucial for scholars and policymakers seeking to address barriers to employment and strengthen labour market participation. While unemployment stigma has been widely documented, the consequences of labour market inactivity have received far less attention.

In this study, we investigate whether, when, and why employers differentiate between candidates based on their non-employment histories. Using a factorial survey experiment, real-life recruiters evaluated the hireability and perceived productivity of fictitious applicants who differed in the reason for and duration of their non-employment spells.

Our findings reveal clear hiring disparities among non-employed candidates. Employers appear to rank candidates according to their work histories: training breaks are viewed most favourably, followed by caregiving breaks, health-related interruptions and unemployment, while breaks due to discouragement face the strongest stigma. These evaluations closely mirror employers’ perceptions of productivity. Candidates with training breaks are perceived as highly skilled and motivated; caregivers are valued for their social skills but seen as less flexible; individuals returning after illness are perceived as motivated but may raise health concerns; and discouraged workers are judged most negatively, particularly regarding motivation and self-discipline.

In addition, longer periods of non-employment generally reduce hiring prospects, with the notable exception of training breaks. Overall, the results highlight how employers interpret different forms of labour market inactivity and how these interpretations shape hiring decisions.