Seminar Vol. 243

Title: How Wage Offers Affect Job Applicants: Field Experimental Evidence on Directed Search

Speaker: | Haoran He, Beijing Normal University

Time:   October 30,202013:30-15:00

Venue: Conference Room 106B, IESR, Zhonghui Building (College of Economics)

Abstract:

We explore the impact of wage offers on job applications, testing implications of the directed search model and trying to distinguish it from random search. We use a field experiment conducted on a Chinese job board, with real jobs for which we randomly varied the wage offer across three ranges. We find that higher wage offers raise application rates overall, which is consistent with directed search but can also arise with random search. We also find that higher wage offers raise application rates for job seekers with reservation wages lower than all wage offers, and the increase in application rates is stronger for those with higher reservation wages. The latter type of evidence is consistent with directed search but not random search. Hence, they lend support to directed search models.