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How wage announcements affect job search - a field experiment

Author

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  • Belot, Michele

    (European University Institute)

  • Kircher, Philipp

    (School of Economics, University of Edinburgh)

  • Muller, Paul

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

We study how job seekers respond to wage announcements by assigning wages randomly to pairs of otherwise similar vacancies in a large number of professions. High wage vacancies attract more interest, in contrast with much of the evidence based on observational data. Some applicants only show interest in the low wage vacancy even when they were exposed to both. Both findings are core predictions of theories of directed/competitive search where workers trade o_ the wage with the perceived competition for the job. A calibrated model with multiple applications and on-the-job search induces magnitudes broadly in line with the empirical findings.

Suggested Citation

  • Belot, Michele & Kircher, Philipp & Muller, Paul, 2018. "How wage announcements affect job search - a field experiment," Working Papers in Economics 739, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0739
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    Cited by:

    1. Bassier, Ihsaan & Manning, Alan & Petrongolo, Barbara, 2023. "Vacancy duration and wages," LSE Research Online Documents on Economics 121287, London School of Economics and Political Science, LSE Library.
    2. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2023. "Perceived returns to job search," Labour Economics, Elsevier, vol. 80(C).
    3. Carlos Carrillo-Tudela & Hermann Gartner & Leo Kaas, 2023. "Recruitment Policies, Job-Filling Rates, and Matching Efficiency," Journal of the European Economic Association, European Economic Association, vol. 21(6), pages 2413-2459.
    4. Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2023. "Designing Information Provision Experiments," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 3-40, March.
    5. Julien Pascal, 2023. "Rental housing market and directed search," BCL working papers 179, Central Bank of Luxembourg.
    6. Delfino, Alexia, 2021. "Breaking Gender Barriers: Experimental Evidence on Men in Pink-Collar Jobs," IZA Discussion Papers 14083, Institute of Labor Economics (IZA).
    7. Andrea Gerali & Elisa Guglielminetti & Danilo Liberati, 2021. "(In)efficient Separations, Firing Costs and Temporary Contracts," Temi di discussione (Economic working papers) 1330, Bank of Italy, Economic Research and International Relations Area.
    8. KAMBAYASHI, Ryo & KAWAGUCHI, Kohei & OTANI, Suguru, 2023. "Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process," Discussion Paper Series 746, Institute of Economic Research, Hitotsubashi University.
    9. Peter Kuhn & Kailing Shen, 2023. "What Happens When Employers Can No Longer Discriminate in Job Ads?," American Economic Review, American Economic Association, vol. 113(4), pages 1013-1048, April.
    10. Nikhil Datta, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," CEP Discussion Papers dp1930, Centre for Economic Performance, LSE.
    11. Braun, Christine & Engelhardt, Bryan & Griffy, Benjamin & Rupert, Peter, 2020. "Testing the independence of job arrival rates and wage offers," Labour Economics, Elsevier, vol. 63(C).
    12. Shi, Shouyong, 2023. "Sequentially mixed search and equilibrium price dispersion," Journal of Economic Theory, Elsevier, vol. 213(C).
    13. Victor Alfonso Naya & Guillaume Bied & Philippe Caillou & Bruno Crépon & Christophe Gaillac & Elia Pérennes & Michèle Sebag, 2021. "Designing labor market recommender systems: the importance of job seeker preferences and competition," Post-Print hal-03540319, HAL.
    14. Larissa Fuchs & Matthias Heinz & Pia Pinger & Max Thon, 2024. "How to Attract Talents? Field-Experimental Evidence on Emphasizing Flexibility and Career Opportunities in Job Advertisements," ECONtribute Discussion Papers Series 332, University of Bonn and University of Cologne, Germany.
    15. Richard Audoly & Manudeep Bhuller & Tore Adam Reiremo, 2024. "The Pay and Non-Pay Content of Job Ads," Staff Reports 1124, Federal Reserve Bank of New York.
    16. Ihsaan Bassier & Alan Manning & Barbara Petrongolo, 2023. "Vacancy duration and wages," CEP Discussion Papers dp1943, Centre for Economic Performance, LSE.
    17. Datta, Nikhil, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," LSE Research Online Documents on Economics 121312, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    online job search; directed search; wage competition; field experiments;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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