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

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Listed:
  • Kettemann, Andreas

    () (University of Zurich)

  • Mueller, Andreas I.

    () (Columbia University)

  • 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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11852
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    References listed on IDEAS

    as
    1. 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.
    2. Marinescu, Ioana, 2017. "The general equilibrium impacts of unemployment insurance: Evidence from a large online job board," Journal of Public Economics, Elsevier, vol. 150(C), pages 14-29.
    3. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2003. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 127-148, June.
    4. 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.
    5. 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.
    6. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    7. 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.
    8. Steven J. Davis, 2001. "The Quality Distribution of Jobs and the Structure of Wages in Search Equilibrium," NBER Working Papers 8434, National Bureau of Economic Research, Inc.
    9. Abraham, Katharine G, 1983. "Structural-Frictional vs. Deficient Demand Unemployment: Some New Evidence," American Economic Review, American Economic Association, vol. 73(4), pages 708-724, September.
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    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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