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Wage information and applicant selection

Author

Listed:
  • Maria Balgova

    (Bank of England and IZA)

  • Tsegay Tekleselassie

    (Wellesley College)

  • Lukas Hensel

    (Peking University)

  • Marc Witte

    (VU Amsterdam, Tinbergen Institute and IZA)

Abstract

Wage information is rare in job adverts, yet crucial for search. To study this information friction, we run a field experiment with real vacancies, randomly adding or withholding wage information. Disclosing wages does not change average application volumes. Instead, it amplifies the wage elasticity of applications: higher‑wage vacancies receive more applicants, while lower‑wage vacancies receive fewer. Average applicant quality remains unchanged, challenging standard directed search models. We rationalise the lack of skill‑based sorting with two‑sided limited information about applicants’ skills. We further show that firms’ decision not to post wages can act as insurance against unproductive matches.

Suggested Citation

  • Maria Balgova & Tsegay Tekleselassie & Lukas Hensel & Marc Witte, 2025. "Wage information and applicant selection," Bank of England Staff Working Paper series 1148, Bank of England.
    • Handle: RePEc:boe:boeewp:023270
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2025/wage-information-and-applicant-selection.pdf
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    More about this item

    Keywords

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    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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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