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How Wage Announcements Affect Job Search Behaviour - A Field Experimental Investigation

Author

Listed:
  • Philipp Kircher

    (European University Institute and University of Edinburgh)

  • Paul Muller

    (Gothenburg University)

  • Michele Belot

    (University of Edinburgh)

Abstract
In this study we introduce a small number of artificial vacancies with randomised characteristics in an otherwise standard job search platform. This allows us to study how job seekers react to job characteristics - in analogy of usual randomised audit studies of employers' reactions to applicant characteristics. We focus on the reaction to wage announcements, and test the main implications of directed search: high wages should attract more and better applicants, but some applicants apply only to low wages even if higher wage offers are present. Both parts of the theory and support among the randomised job offers, suggesting an allocative role for wage competition in search markets. We calibrate a directed search model with multiple applications and on-the-job search and and that it can reproduce our findings quantitatively.

Suggested Citation

  • Philipp Kircher & Paul Muller & Michele Belot, 2017. "How Wage Announcements Affect Job Search Behaviour - A Field Experimental Investigation," 2017 Meeting Papers 722, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:722
    as

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    References listed on IDEAS

    as
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    5. Galenianos, Manolis & Kircher, Philipp, 2009. "Directed search with multiple job applications," Journal of Economic Theory, Elsevier, vol. 144(2), pages 445-471, March.
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    7. Ioana Marinescu & Ronald Wolthoff, 2020. "Opening the Black Box of the Matching Function: The Power of Words," Journal of Labor Economics, University of Chicago Press, vol. 38(2), pages 535-568.
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    11. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 385-411, April.
    12. Ioana Marinescu & Roland Rathelot, 2018. "Mismatch Unemployment and the Geography of Job Search," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 42-70, July.
    13. Philipp Kircher, 2009. "Efficiency of Simultaneous Search," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 861-913, October.
    14. Acemoglu, Daron & Shimer, Robert, 1999. "Holdups and Efficiency with Search Frictions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 827-849, November.
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    16. Ronald Wolthoff, 2014. "It'S About Time: Implications Of The Period Length In An Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 839-867, August.
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    Cited by:

    1. David Berger & Kyle Herkenhoff & Simon Mongey, 2022. "Labor Market Power," American Economic Review, American Economic Association, vol. 112(4), pages 1147-1193, April.
    2. Kuhn, Peter & Shen, Kailing & Zhang, Shuo, 2020. "Gender-targeted job ads in the recruitment process: Facts from a Chinese job board," Journal of Development Economics, Elsevier, vol. 147(C).
    3. Stefano Banfi & Benjamín Villena-Roldán, 2019. "Do High-Wage Jobs Attract More Applicants? Directed Search Evidence from the Online Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 37(3), pages 715-746.
    4. Kircher, Philipp & Wright, Randall & Julien, Benoit & Guerrieri, Veronica, 2017. "Directed Search: A Guided Tour," CEPR Discussion Papers 12315, C.E.P.R. Discussion Papers.

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