Working Paper: CEPR ID: DP13286
Authors: Michele Belot; Philipp Kircher; Paul Muller
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 off 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.
Keywords: online job search; directed search; wage competition; field experiments
JEL Codes: J31; J63; J64; C93
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| low wage vacancy not saved (J63) | high wage vacancy not saved (J63) |
| higher wage jobs (J39) | perceived as requiring better quality applicants (J24) |
| higher wage jobs (J39) | attracting more competition (L49) |
| higher wages (J39) | increased interest in job vacancies (J68) |
| 1% increase in wage (J31) | 0.7% to 0.9% increase in likelihood of saving the vacancy (J63) |
| higher wages (J39) | more saves compared to lower wage vacancies (J63) |