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How Wage Announcements Affect Job Search—A Field Experiment

Author

Listed:
  • Michèle Belot
  • Philipp Kircher
  • Paul Muller

Abstract

In a field experiment, we study how job seekers respond to posted wages by assigning wages randomly to pairs of otherwise similar vacancies in a large number of professions. Higher wages attract significantly more interest. Still, a nontrivial number of applicants only reveal an interest in the low-wage vacancy. With a complementary survey, we show that external raters perceive higher-wage jobs as more competitive. These findings qualitatively support core predictions of theories of directed/competitive search, though in the simplest calibrated model, applications react too strongly to the wage. We discuss extensions such as on-the-job search that rectify this.

Suggested Citation

  • Michèle Belot & Philipp Kircher & Paul Muller, 2022. "How Wage Announcements Affect Job Search—A Field Experiment," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(4), pages 1-67, October.
    • Handle: RePEc:aea:aejmac:v:14:y:2022:i:4:p:1-67
    DOI: 10.1257/mac.20200116
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    Citations

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    Cited by:

    1. Ihsaan Bassier & Alan Manning & Barbara Petrongolo, 2023. "Vacancy duration and wages," CEP Discussion Papers dp1943, Centre for Economic Performance, LSE.
    2. Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2023. "Designing Information Provision Experiments," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 3-40, March.
    3. Kambayashi, Ryo & Kawaguchi, Kohei & Otani, Suguru, 2024. "Decomposing Recruitment Elasticity in Job Matching," SocArXiv wavdn, Center for Open Science.
    4. Julien Pascal, 2023. "Rental housing market and directed search," BCL working papers 179, Central Bank of Luxembourg.
    5. Erica Field & Kate Vyborny, 2022. "Women’s Mobility and Labor Supply: Experimental Evidence from Pakistan," ADB Economics Working Paper Series 655, Asian Development Bank.
    6. Alexia Delfino, 2024. "Breaking Gender Barriers: Experimental Evidence on Men in Pink-Collar Jobs," American Economic Review, American Economic Association, vol. 114(6), pages 1816-1853, June.
    7. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2023. "Perceived returns to job search," Labour Economics, Elsevier, vol. 80(C).
    8. Andrea Gerali & Elisa Guglielminetti & Danilo Liberati, 2021. "(In)efficient Separations, Firing Costs and Temporary Contracts," Temi di discussione (Economic working papers) 1330, Bank of Italy, Economic Research and International Relations Area.
    9. KAMBAYASHI, Ryo & KAWAGUCHI, Kohei & OTANI, Suguru, 2023. "Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process," Discussion Paper Series 746, Institute of Economic Research, Hitotsubashi University.
    10. repec:osf:socarx:p82fk_v1 is not listed on IDEAS
    11. Nikhil Datta, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," CEP Discussion Papers dp1930, Centre for Economic Performance, LSE.
    12. Carlos Carrillo-Tudela & Hermann Gartner & Leo Kaas, 2023. "Recruitment Policies, Job-Filling Rates, and Matching Efficiency," Journal of the European Economic Association, European Economic Association, vol. 21(6), pages 2413-2459.
    13. Braun, Christine & Engelhardt, Bryan & Griffy, Benjamin & Rupert, Peter, 2020. "Testing the independence of job arrival rates and wage offers," Labour Economics, Elsevier, vol. 63(C).
    14. Shi, Shouyong, 2023. "Sequentially mixed search and equilibrium price dispersion," Journal of Economic Theory, Elsevier, vol. 213(C).
    15. Datta, Nikhil, 2024. "Local monopsony power," LSE Research Online Documents on Economics 126772, London School of Economics and Political Science, LSE Library.
    16. Blundell, Jack & Duchini, Emma & Simion, Ştefania & Turrell, Arthur, 2025. "Pay transparency and gender equality," LSE Research Online Documents on Economics 129500, London School of Economics and Political Science, LSE Library.
    17. repec:iab:iabdpa:202015 is not listed on IDEAS
    18. Victor Alfonso Naya & Guillaume Bied & Philippe Caillou & Bruno Crépon & Christophe Gaillac & Elia Pérennes & Michèle Sebag, 2021. "Designing labor market recommender systems: the importance of job seeker preferences and competition," Post-Print hal-03540319, HAL.
    19. Larissa Fuchs & Matthias Heinz & Pia Pinger & Max Thon, 2024. "How to Attract Talent? Field-Experimental Evidence on Emphasizing Flexibility and Career Opportunities in Job Advertisements," ECONtribute Discussion Papers Series 332, University of Bonn and University of Cologne, Germany.
    20. Peter Kuhn & Kailing Shen, 2023. "What Happens When Employers Can No Longer Discriminate in Job Ads?," American Economic Review, American Economic Association, vol. 113(4), pages 1013-1048, April.
    21. Richard Audoly & Manudeep Bhuller & Tore Adam Reiremo, 2024. "The Pay and Non-Pay Content of Job Ads," Staff Reports 1124, Federal Reserve Bank of New York.
    22. Datta, Nikhil, 2023. "The measure of monopsony: the labour supply elasticity to the firm and its constituents," LSE Research Online Documents on Economics 121312, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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