Job Search, Wages, and Inflation

Laura Pilossoph and Jane Ryngaert

No 33042, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How do inflation expectations affect the job search behavior of workers when wages are set in nominal terms? A canonical job search model incorporating nominal wage rigidities implies that on-the-job search should increase with expected inflation. In a novel survey, we show that workers are more likely to search at higher values of hypothetical inflation. In the Survey of Consumer Expectations, within-respondent variation in inflation expectations predicts search. A back-of-the envelope calculation suggests the search mechanism and the 2021-2023 rise in inflation expectations can explain roughly 30 percent of the change in the job-to-job transition probability over that period.

JEL-codes: E31 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-mon
Note: ME
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Citations: View citations in EconPapers (1)

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