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Wage Information and Applicant Selection

Author

Listed:
  • Balgova, Maria

    (Bank of England)

  • Tekleselassie, Tsegay

    (affiliation not available)

  • Hensel, Lukas

    (Peking University)

  • Witte, Marc J.

    (Vrije Universiteit Amsterdam)

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 rationalize 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

  • Balgova, Maria & Tekleselassie, Tsegay & Hensel, Lukas & Witte, Marc J., 2025. "Wage Information and Applicant Selection," IZA Discussion Papers 18220, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18220
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • 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
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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