Wage Expectations and Job Search

Steffen Altmann (), Robert Mahlstedt (), Malte Jacob Rattenborg (), Alexander Sebald (), Sonja Settele () and Johannes Wohlfart ()
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Steffen Altmann: University of Würzburg, University of Copenhagen
Robert Mahlstedt: University of Copenhagen
Malte Jacob Rattenborg: University of Copenhagen
Alexander Sebald: Copenhagen Business School
Sonja Settele: University of Cologne, ECONtribute, Max Planck Institute for Behavioral Economics & CEBI
Johannes Wohlfart: University of Cologne, ECONtribute, Max Planck Institute for Behavioral Economics & CEBI

No 386, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: In a field experiment with 9,000 Danish job seekers, we study how unemployed workers’ wage expectations affect job search and re-employment. In our survey, we generate exogenous variation in respondents’ wage expectations by informing a random half of them about re-employment wages of comparable workers. The intervention increases job-finding as measured in administrative data for both initially optimistic and initially pessimistic respondents, but through different channels: initial optimists lower their reservation wages and intensify search, while pessimists raise reservation wages and redirect applications toward local vacancies. Consistent with spatial search frictions, narrowing the geographic scope accelerates job finding among pessimists.

Keywords: Expectations; job search (search for similar items in EconPapers)
JEL-codes: D83 D84 J64 (search for similar items in EconPapers)
Pages: 95 pages
Date: 2026-01
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:386

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