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Vacancy Durations and Entry Wages: Evidence from Linked Vacancy-Employer-Employee Data

Author

Listed:
  • Kettemann, Andreas

    () (University of Zurich)

  • Mueller, Andreas I.

    () (University of Texas at Austin)

  • Zweimüller, Josef

    () (University of Zurich)

Abstract

This paper explores the relationship between the duration of a vacancy and the starting wage of a new job, using unusually informative data comprising detailed information on vacancies, the establishments posting the vacancies and the workers eventually filling the vacancies. We find that vacancy durations are negatively correlated with the starting wage and that this negative association is particularly strong with the establishment component of the starting wage. We also confirm previous findings that growing establishments fill their vacancies faster. To understand the relationship between establishment growth, vacancy filling and entry wages, we calibrate a model with directed search and ex-ante heterogeneous workers and firms. We find a strong tension between matching the sharp increase in vacancy filling for growing firms and the response of vacancy filling to firm-level wages. We discuss the implications of this finding as well as potential resolutions.

Suggested Citation

  • Kettemann, Andreas & Mueller, Andreas I. & Zweimüller, Josef, 2018. "Vacancy Durations and Entry Wages: Evidence from Linked Vacancy-Employer-Employee Data," IZA Discussion Papers 11852, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11852
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    References listed on IDEAS

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    1. Robert E. Hall & Andreas I. Mueller, 2018. "Wage Dispersion and Search Behavior: The Importance of Nonwage Job Values," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1594-1637.
    2. Rafael Lalive & Jan Van Ours & Josef Zweimuller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 1009-1038.
    3. Modestino, Alicia Sasser & Shoag, Daniel & Ballance, Joshua, 2015. "Upskilling: Do Employers Demand Greater Skill When Workers Are Plentiful?," Working Paper Series rwp15-013, Harvard University, John F. Kennedy School of Government.
    4. Alessandro Gavazza & Simon Mongey & Giovanni L. Violante, 2018. "Aggregate Recruiting Intensity," American Economic Review, American Economic Association, vol. 108(8), pages 2088-2127, August.
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    8. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November.
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    10. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    11. van Ours, Jan & Ridder, Geert, 1991. "Cyclical variation in vacancy durations and vacancy flows : An empirical analysis," European Economic Review, Elsevier, vol. 35(5), pages 1143-1155, July.
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    16. Uwe Sunde, 2007. "Empirical Matching Functions: Searchers, Vacancies, and (Un‐)biased Elasticities," Economica, London School of Economics and Political Science, vol. 74(295), pages 537-560, August.
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    Cited by:

    1. Bhuller, Manudeep & Kostøl, Andreas & Vigtel, Trond Christian, 2019. "How Broadband Internet Affects Labor Market Matching," Memorandum 10/2019, Oslo University, Department of Economics.
    2. Mongey, Simon & Violante, Giovanni L., 2019. "Macro Recruiting Intensity from Micro Data," CEPR Discussion Papers 14004, C.E.P.R. Discussion Papers.
    3. Simon Mongey & Giovanni L. Violante, 2019. "Macro Recruiting Intensity from Micro Data," NBER Working Papers 26231, National Bureau of Economic Research, Inc.
    4. Satoshi Tanaka & Lawrence Warren & David Wiczer, 2020. "Earnings Growth, Job Flows and Churn," Working Papers 20-15, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    vacancy posting; vacancy duration; recruiting; search; wages;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

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