I do feel recruiters believe that. I've not seen scientific evidence.

The way you're wording it, it seems like a choice between people who just program, and people who program but also study algorithms. In that case, it's easy, the latter will know more.

He'd also be a better programmer if he instead studied design patterns, learned some extra languages or learned about type systems...

There are a lot of things that you can learn that'll make you a better developer, but that you can avoid if you stay at a lot enough level. Advanced algorithms are one of those.

EDIT: there are of course some narrow applications where advanced algorithms are essential. Good algorithms can have a huge impact on performance, where some things are only possible with good algorithms (like FFT). The reason they're not essential to study for everyone is that they're often reusable.

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