How Wage Announcements Affect Job Search: A Field Experiment

75 Pages Posted: 24 Sep 2018

See all articles by Michèle Belot

Michèle Belot

University of Oxford - Nuffield Department of Medicine

Philipp Kircher

University of Pennsylvania - Department of Economics; IZA Institute of Labor Economics

Paul Muller

University of Gothenburg

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 Classification: J31, J63, J64, C93

Suggested Citation

Belot, Michèle V. K. and Kircher, Philipp and Muller, Paul, How Wage Announcements Affect Job Search: A Field Experiment. IZA Discussion Paper No. 11814, Available at SSRN: https://ssrn.com/abstract=3253473 or http://dx.doi.org/10.2139/ssrn.3253473

Michèle V. K. Belot (Contact Author)

University of Oxford - Nuffield Department of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

Philipp Kircher

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-6777 (Phone)
215-573-2057 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Paul Muller

University of Gothenburg ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

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