Directed Search with Phantom Vacancies

James Albrecht, Bruno Decreuse and Susan Vroman

Working Papers from Georgetown University, Department of Economics

Abstract: When vacancies are filled, the ads that were posted are often not withdrawn, creating "phantom" vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age and so equalize the expected benefit of a job application across listing age. Forming a match with a vacancy of age a creates a phantom of age a with probability beta and this leads to a negative informational externality that affects all vacancies of age a and older. Thus, the magnitude of this externality decreases with the age of the listing when the match is formed. Relative to the constrained e¢ cient search behavior, the directed search of job seekers leads them to over-apply to younger listings. We illustrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation. Classification- D83, J64

Keywords: Unemployment; directed search; phantom vacancies (search for similar items in EconPapers)
Pages: 38
Date: 2021-03-15
New Economics Papers: this item is included in nep-dge and nep-lab
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: DIRECTED SEARCH WITH PHANTOM VACANCIES (2023)
Working Paper: DIRECTED SEARCH WITH PHANTOM VACANCIES (2022)
Working Paper: Directed Search with Phantom Vacancies (2020)
Working Paper: Directed Search with Phantom Vacancies (2017)
Working Paper: Directed Search with Phantom Vacancies (2017)
Working Paper: Directed Search with Phantom Vacancies (2015)
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