Feedback, Confidence and Job Search Behavior

Tsegay Tekleselassie, Marc Witte, Jonas Radbruch, Lukas Hensel and Ingo E. Isphording
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Tsegay Tekleselassie: Wellesley College
Marc Witte: Vrije Universiteit Amsterdam and Tinbergen Institute
Jonas Radbruch: Humboldt University Berlin
Lukas Hensel: Peking University
Ingo E. Isphording: IZA Institute of Labor Economics

No 25-019/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We conduct a field experiment with job seekers to investigate how feedback influences job search and labor market outcomes. Job seekers who receive feedback on their ability compared to other job seekers update their beliefs and increase their search effort. Specifically, initially underconfident individuals intensify their job search. In contrast, overconfident individuals do not adjust their behavior. Moreover, job seekers' willingness-to-pay (WTP) for feedback predicts treatment effects: only among underconfident individuals with positive WTP, we observe significant increases in both search effort and search success. We present suggestive evidence that this pattern arises from heterogeneity in how job seekers perceive the relevance of relative cognitive ability to job search returns. While the intervention appears cost-effective, job seekers' WTP remains insufficient to cover its costs.

Keywords: job search; overconfidence; feedback; willingness-to-pay; field experiment (search for similar items in EconPapers)
JEL-codes: C93 J22 J24 J64 (search for similar items in EconPapers)
Date: 2025-03-14
New Economics Papers: this item is included in nep-exp, nep-lab and nep-neu
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