Labor Market News and Expectations about Jobs & Earnings

Bernhard Schmidpeter
Additional contact information
Bernhard Schmidpeter: Economics, Johannes Kepler University Linz

No 2023-14, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: Little is known about how workers update expectations about job search and earnings when exposed to labor market news. To identify the impact of news on expectations, I exploit Foxconn's unexpected announcement to build a manufacturing plant in Racine County. Exposure to positive news leads to an increase in expected salary growth at the current firm. Individuals also revise their expectations about outside offers upward, anchoring their beliefs to Foxconn's announced wages. They act on their updated beliefs with a small increase in current consumption. Negative news from a scaled-down plan leads to a revision of expectations back toward baseline.

Keywords: beliefs formation; wage expectations; outside options; consumption (search for similar items in EconPapers)
JEL-codes: C33 D84 E24 J31 J63 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-lab
Note: English
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econ.jku.at/papers/2023/wp2314.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2023-14

Access Statistics for this paper

More papers in Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria Contact information at EDIRC.
Bibliographic data for series maintained by René Böheim ().