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Wage Expectations and Job Search

Author

Listed:
  • Steffen Altmann

    (University of Würzburg, University of Copenhagen)

  • Robert Mahlstedt

    (University of Copenhagen)

  • Malte Jacob Rattenborg

    (University of Copenhagen)

  • Alexander Sebald

    (Copenhagen Business School)

  • Sonja Settele

    (University of Cologne, ECONtribute, Max Planck Institute for Behavioral Economics & CEBI)

  • Johannes Wohlfart

    (University of Cologne, ECONtribute, Max Planck Institute for Behavioral Economics & CEBI)

Abstract

In a field experiment with 9,000 Danish job seekers, we study how unemployed workers’ wage expectations affect job search and re-employment. In our survey, we generate exogenous variation in respondents’ wage expectations by informing a random half of them about re-employment wages of comparable workers. The intervention increases job-finding as measured in administrative data for both initially optimistic and initially pessimistic respondents, but through different channels: initial optimists lower their reservation wages and intensify search, while pessimists raise reservation wages and redirect applications toward local vacancies. Consistent with spatial search frictions, narrowing the geographic scope accelerates job finding among pessimists.

Suggested Citation

  • Steffen Altmann & Robert Mahlstedt & Malte Jacob Rattenborg & Alexander Sebald & Sonja Settele & Johannes Wohlfart, 2026. "Wage Expectations and Job Search," ECONtribute Discussion Papers Series 386, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:386
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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_386_2026.pdf
    File Function: First version, 2026
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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