Working Paper: NBER ID: w16185
Authors: Peter Coles; Alexey Kushnir; Muriel Niederle
Abstract: Many labor markets share three stylized facts: employers cannot give full attention to all candidates, candidates are ready to provide information about their preferences for particular employers, and employers value and are prepared to act on this information. In this paper we study how a signaling mechanism, where each worker can send a signal of interest to one employer, facilitates matches in such markets. We find that introducing a signaling mechanism increases the welfare of workers and the number of matches, while the change in firm welfare is ambiguous. A signaling mechanism adds the most value for balanced markets.
Keywords: No keywords provided
JEL Codes: C78; J01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introducing a signaling mechanism (Y20) | expected number of matches (C78) |
| introducing a signaling mechanism (Y20) | worker welfare (J38) |
| signaling mechanism (D82) | firm welfare (L21) |