Wage Information and Applicant Selection

Maria Balgova (), Tsegay Tekleselassie, Lukas Hensel and Marc J. Witte ()
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Maria Balgova: Bank of England
Marc J. Witte: Vrije Universiteit Amsterdam

No 18220, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Wage information is rare in job adverts, yet crucial for search. To study this information friction, we run a field experiment with real vacancies, randomly adding or withholding wage information. Disclosing wages does not change average application volumes. Instead, it amplifies the wage elasticity of applications: higher-wage vacancies receive more applicants, while lower-wage vacancies receive fewer. Average applicant quality remains unchanged, challenging standard directed search models. We rationalize the lack of skill-based sorting with two-sided limited information about applicants’ skills. We further show that firms’ decision not to post wages can act as insurance against unproductive matches.

Keywords: vacancy posting; wage posting; information; field experiment; job search (search for similar items in EconPapers)
JEL-codes: C93 J31 J62 J63 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-exp and nep-lma
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