Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 739: How wage announcements affect job search - a field experiment
Michele Belot (), Philipp Kircher () and Paul Muller ()
Additional contact information
Michele Belot: European University Institute
Philipp Kircher: School of Economics, University of Edinburgh
Paul Muller: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden
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.
Keywords: online job search; directed search; wage competition; field experiments
68 pages, August 2018
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