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Directed Search with Phantom Vacancies

Author

Listed:
  • James Albrecht

    (Department of Economics, Georgetown University, IZA - Institute for the study of labor - Institute for the Study of Labor - IZA)

  • Bruno Decreuse

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Susan Vroman

    (Department of Economics, Georgetown University, IZA - Institute for the study of labor - Institute for the Study of Labor - IZA)

Abstract

When vacancies are filled, the ads that were posted are generally not withdrawn, creating phantom vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age for otherwise identical listings and so equalize the probability of matching across listing age. Forming a match with a vacancy of age a creates a phantom of age a and thus creates a negative informational externality that affects all vacancies of age a or older. The magnitude of this externality decreases with a. The directed search behavior of job seekers leads them to over-apply to younger listings. We calibrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation.

Suggested Citation

  • James Albrecht & Bruno Decreuse & Susan Vroman, 2017. "Directed Search with Phantom Vacancies," Working Papers halshs-01484717, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01484717
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01484717
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    References listed on IDEAS

    as
    1. 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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    6. Albrecht, James & Navarro, Lucas & Vroman, Susan, 2010. "Efficiency in a search and matching model with endogenous participation," Economics Letters, Elsevier, vol. 106(1), pages 48-50, January.
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    8. 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.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Directed Search with Phantom Vacancies
      by Christian Zimmermann in NEP-DGE blog on 2017-04-18 20:10:17

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    Cited by:

    1. Michèle Belot & Philipp Kircher & Paul Muller, 2018. "How Wage Announcements Affect Job Search - A Field Experiment," CESifo Working Paper Series 7302, CESifo.
    2. Felix Ehrenfried & Christian Holzner, 2018. "Dynamics and Endogeneity of Firms' Recruitment Behaviour," CESifo Working Paper Series 7283, CESifo.
    3. Ehrenfried, Felix & Holzner, Christian, 2019. "Dynamics and endogeneity of firms’ recruitment behaviour," Labour Economics, Elsevier, vol. 57(C), pages 63-84.

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    More about this item

    Keywords

    vacancy age; information persistence; directed search;
    All these keywords.

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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