Michael Siegenthaler, ETH

"The Role of Wages and Fringe Benefits in Job Search: Evidence from a Large-Scale Online Field Experiment"

Abstract

A fundamental question in the job search literature concerns the extent to which job seekers' application behavior is influenced by disparities in wages and fringe benefits between jobs. In this study, we quantify job seekers' compensation preferences by randomly providing users of various Swiss job boards with supplementary information regarding the wage and fringe benefits associated with the positions they are exploring. Our preliminary findings indicate that job seekers exhibit a precisely estimated but small responsiveness to posted wages. A 10% higher wage increases job seekers' probability to view and apply to an ad by 3-5%, suggesting that the firm labor supply elasticity is 0.6-1. Job seekers in lower-paying occupations are more sensitive to wages, implying a larger elasticity. Furthermore, job seekers have a substantial willingness to pay for at least 5 of the 12 fringe benefits in the experiment. On average, they are willing to forgo a 20% higher wage for the opportunity to work from home, 16% for a company car, and 9% for access to firm-sponsored childcare facilities. Job seekers' compensation preferences are similar in male- and female-dominated occupations.

Contact person: Daphné Skandalis