Abstract: We explore the relationship between the duration of a vacancy and the starting wage of a new job. We use an unusually informative data set from Austria linking vacancy data from the public employment service to matched employer-employee data for the social security register. The main finding emerging from our analysis is that vacancy duration is negatively correlated with the starting wage and that this negative association is particularly strong with the establishment component of the starting wage. We also replicate the results of Davis, Faberman and Haltiwanger (2013) that growing establishments fill their vacancies faster. To understand the relationship between establishment growth, vacancy filling and entry wages, we calibrate a model with directed search, posted wages and ex-ante heterogeneous workers and firms. While the model qualitatively captures our empirical findings, there is a strong tension between matching the sharp increase in vacancy filling for growing firms and the response of vacancy filling to firm-level wages. We discuss potential resolutions of this tension as well as implications of our findings for the evolution of aggregate matching efficiency over the business cycle.
Friday, September 7, 2018
3:30pm – 5:00pm
Small reception to follow in Room 426. All are invited to attend.