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Wages, Job Queues, and Skills

Author

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  • Ronald Wolthoff

    (University of Toronto)

  • Ioana Marinescu

    (University of Chicago)

Abstract

We study the relationship between wages and the number and quality of applicants that a vacancy attracts. Using data from a large US employment website, we show that higher wages attract better applicants. Surprisingly, higher wages are associated with fewer applications, and this is robust to controlling for industry and occupation fixed effects. Only within specific job titles are higher wages associated with more applications. Our theoretical model shows that such a pattern is consistent with skills demanded by firms being highly job specific. The model has additional testable implications about rent sharing and unemployment rates by skill.

Suggested Citation

  • Ronald Wolthoff & Ioana Marinescu, 2012. "Wages, Job Queues, and Skills," 2012 Meeting Papers 592, Society for Economic Dynamics.
  • Handle: RePEc:red:sed012:592
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    File URL: https://economicdynamics.org/meetpapers/2012/paper_592.pdf
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    References listed on IDEAS

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    1. Galenianos, Manolis & Kircher, Philipp, 2009. "Directed search with multiple job applications," Journal of Economic Theory, Elsevier, vol. 144(2), pages 445-471, March.
    2. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 869-891.
    3. Kenneth Burdett & Shouyong Shi & Randall Wright, 2001. "Pricing and Matching with Frictions," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1060-1085, October.
    4. Kevin Lang & Michael Manove & William T. Dickens, 2005. "Racial Discrimination in Labor Markets with Posted Wage Offers," American Economic Review, American Economic Association, vol. 95(4), pages 1327-1340, September.
    5. R. Jason Faberman & Guido Menzio, 2016. "Evidence on the Relationship between Recruiting and Starting Wage," NBER Working Papers 22915, National Bureau of Economic Research, Inc.
    6. Ronald Wolthoff, 2010. "Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search," 2010 Meeting Papers 114, Society for Economic Dynamics.
    7. Philipp Kircher, 2009. "Efficiency of Simultaneous Search," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 861-913, October.
    8. Albrecht, James W & Axell, Bo, 1984. "An Equilibrium Model of Search Unemployment," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 824-840, October.
    9. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Mobility and Wage Inequality," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 731-759.
    10. Alain Delacroix & Shouyong Shi, 2006. "Directed Search On The Job And The Wage Ladder," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 651-699, May.
    11. Harry J. Holzer & Lawrence F. Katz & Alan B. Krueger, 1991. "Job Queues and Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 739-768.
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    Cited by:

    1. Ronald Wolthoff, 2014. "Applications and Interviews: Firms' Recruiting Decisions in a Frictional Labor Market," Working Papers tecipa-522, University of Toronto, Department of Economics.

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