Search Costs, Outside Options, and On-the-Job Search

I study how beliefs about search costs, returns to search effort, and outside options relate to the job mobility decisions of employed workers. I design an online survey and administer it to a representative sample of wage and salaried workers in the US. In the survey, I directly measure employed workers’ perceptions of search costs—time, money, stress—the perceived returns to their job search effort—the expected success rate of their job applications—and their beliefs about their opportunities outside of their current job. I document significant heterogeneity in expectations across demographic groups. Women expect higher costs and lower returns to effort. I find that beliefs about outside options, returns to search effort and search costs are significant predictors of job search intentions. Respondents who expect to spend more time looking for job openings have a lower propensity to search, consistent with the relevance of information frictions. Using two information experiments, I show that accurate information about the median wage does not affect search intentions, whereas shifting perceived search costs improves women’s willingness to search.