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Job Search, Wages, and Inflation

Author

Listed:
  • Laura Pilossoph
  • Jane M. Ryngaert

Abstract

How do inflation expectations affect the job search behavior of workers when wages are set in nominal terms? A canonical job search model incorporating nominal wage rigidities implies that on-the-job search should increase with expected inflation. In a novel survey, we show that workers are more likely to search at higher values of hypothetical inflation. In the Survey of Consumer Expectations, within-respondent variation in inflation expectations predicts search. A back-of-the envelope calculation suggests the search mechanism and the 2021-2023 rise in inflation expectations can explain roughly 30 percent of the change in the job-to-job transition probability over that period.

Suggested Citation

  • Laura Pilossoph & Jane M. Ryngaert, 2024. "Job Search, Wages, and Inflation," NBER Working Papers 33042, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33042
    Note: ME
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    Cited by:

    1. Hie Joo Ahn & Lam Nguyen, 2025. "Who's at Risk? Effects of Inflation on Unemployment Risk," Papers 2505.05757, arXiv.org.

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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