Time：Apr. 27(Wed.), 15:00 -16:30 (Beijing Time)

Title: Estimating Wage Elasticities in Job Matching

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About the speaker:

Kohei Kawaguchi received his PhD in Economics from London School of Economics. Research interests include empirical industrial organization and quantitative marketing. Recently mainly working on antitrust issues. 

Abstract:

Estimation of recruitment elasticity is not straightforward because it consists of the multi-stage bilateral decisions of workers and employers in the job matching process. This paper uses data from one of the largest job matching intermediaries in Japan and finds that the worker's offer acceptance elasticity to the posted wage is low (0.196 for employed and 0.181 for unemployed), the interview attendance elasticity is not significantly different from zero, and the application elasticity is higher but still low (1.040 for employed and 0.458 for unemployed). Anticipated competition for vacancies implied by the high posted wage could be one of the reasons for the differences across stages, because the vacancy is more selective on job offers than on interview calls: the elasticity of interview calls to applications is 0.495 while the elasticity of job offers to interviews is 0.249. The implied upper bound of the recruitment elasticity obtained by calibrating a representative model is 1.236 for the employed and 0.639 for the unemployed. Because there is little search friction within the intermediary, the findings imply that only the differentiation of vacancies could lead to a substantial market power of employers.