The Role of Wages and Fringe Benefits in Job Search

This paper studies the role of wages and job benefits in job search behavior.

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Andreas Gulyas (Universität Mannheim)

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IWH, conference room and via Zoom

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Andreas Gulyas is an assistant professor of economics at University of Mannheim and a research affiliate at IZA, and a member of the Collaborative Research Center Transregio 224 "Economic Perspectives on Societal Challenges: Equality of Opportunity, Market Regulation, and Financial Stability." His research interests are in Macro Search, Labor Economics and Machine Learning.

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We use wage and benefit data from a market-leading employer review platform and run a large-scale randomized control trial on 112 online job boards to estimate the elasticity of job seekers' applications to posted wages and their willingness to pay for job benefits. A 10% higher wage increases job seekers' probability to view and apply to an ad by 3-5%. Many job benefits are highly valued by job seekers: Home office and company cars are valued at around 15 percent of wages, company-provided child care at 10 percent and and parking spots at around 7 percent of wages.
The average vacancy offers job benefits worth 25 percent of wages. We further document that higher-paying firms typically offer more amenities. Taking the distribution and valuation of job benefits into account, we show that job value inequality is significantly higher than wage inequality.