The Role of Wages and Fringe Benefits in Job Search

Abstract

This paper studies the role of wages and job benefits in job search behavior. We use wage and benefit data from a market-leading employer review platform and run a large-scale randomized control trial on an online job board to estimate the elasticity of job seekers' applications to wages and their willingness to pay for job benefits. A 10% higher wage increases job seekers' probability to view and apply to an ad by 3-5%. Many job benefits are highly valued by job seekers: Home office and company cars are valued at around 15 percent of wages, company-provided child care at 10 percent and and parking spots at around 7 percent of wages. The average vacancy offers job benefits worth 25 percent of wages. We further document that higher-paying firms typically offer more amenities. Taking the distribution and valuation of job benefits into account, we show that job value inequality is significantly higher than wage inequality. Joint paper with Andreas Beerli, Stefano Fiorin, Mahsa Khoshnama, Daniel Kopp, and Michael Siegenthaler.