Opening the Black Box of the Matching Function: The Power of Words

45 Pages Posted: 1 Jun 2015

See all articles by Ioana Elena Marinescu

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Ronald P. Wolthoff

VU University Amsterdam - Department of Economics; University of Toronto - Department of Economics; IZA Institute of Labor Economics

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Abstract

How do employers attract the right workers? How important are posted wages vs. other job characteristics? Using data from the leading job board CareerBuilder.com, we show that most vacancies do not post wages, and, for those that do, job titles explain more than 90% of the wage variance. Job titles also explain more than 80% of the across-vacancies variance in the education and experience of applicants. Finally, failing to control for job titles leads to a spurious negative elasticity of labor supply. Thus, our results uncover the previously undocumented power of words in the job matching process.

Keywords: online job search, wages, vacancies, wage variance, occupations, skills

JEL Classification: J31, J63, J64

Suggested Citation

Marinescu, Ioana Elena and Wolthoff, Ronald P. and Wolthoff, Ronald P., Opening the Black Box of the Matching Function: The Power of Words. IZA Discussion Paper No. 9071, Available at SSRN: https://ssrn.com/abstract=2612323 or http://dx.doi.org/10.2139/ssrn.2612323

Ioana Elena Marinescu (Contact Author)

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Ronald P. Wolthoff

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

VU University Amsterdam - Department of Economics ( email )

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1081 HV Amsterdam
Netherlands

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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