Labor Economics, Behavioral Economics, Applied Microeconomics, Applied Econometrics
Working Papers and Work in Progress
The Direct and Indirect Effects of Online Job Search Advice (with S. Altmann, A. Glenny and A. Sebald, revision requested at the Review of Economic Studies, current draft)
We study how online job search advice affects the job search behavior and labor market outcomes of unemployed workers. In a large-scale field experiment, we provide job seekers with vacancy information and occupational recommendations through an online dashboard. A two-stage randomized design with regionally varying treatment intensities allows us to account for treatment spillovers. Our results show that online advice is highly effective and significantly increases job seekers' working hours and labor earnings when the share of treated workers is relatively low. At the same time, we find substantial negative spillovers on other treated job seekers for higher treatment intensities, resulting from increased competition between treated job seekers who apply to the same vacancies. The negative indirect effects completely offset the positive direct effects of search advice when approaching a full roll-out.
Do Job Seekers Understand the UI Benefit System (and Does It Matter)? (with S. Altmann, S. Cairo and A. Sebald, IZA Discussion Paper No. 15747)
We study how job seekers' understanding of complex unemployment benefit rules affects their labor market performance. Combining data from a large-scale scale field experiment, detailed administrative records, and a survey of unemployed job seekers, we document three main results. First, job seekers exhibit pronounced knowledge gaps about the prevailing unemployment benefit rules and their personal benefit entitlements. Second, we show that a low-cost information strategy using a personalized online tool increases job seekers' understanding of the rules and their personal situation. Finally, we document heterogeneous labor-market effects of the intervention depending on the benefit recipients' baseline knowledge, their general employment prospects and the timing of the intervention during the benefit spell.
The Accuracy of Job Seekers' Wage Expectations (with M. Caliendo, A. Schmeisser and S. Wagner, current draft)
Job seekers' misperceptions about the labor market can distort their decision-making and increase the risk of long-term unemployment. Our study establishes objective benchmarks for the subjective wage expectations of unemployed workers. This enables us to provide novel insights into the accuracy of job seekers' wage expectations. First, especially workers with low objective earnings potential tend to display excessively optimistic beliefs about their future wages and anchor their wage expectations too strongly to their pre-unemployment wages. Second, among long-term unemployed workers, overoptimism remains persistent throughout the unemployment spell. Third, higher extrinsic incentives to search more intensively lead job seekers to hold more optimistic wage expectations, yet this does not translate into higher realized wages for them. Lastly, we document a connection between overoptimistic wage expectations and job seekers' tendency to overestimate their reemployment chances. We discuss the role of information frictions and motivated beliefs as potential sources of job seekers' optimism and the heterogeneity in their beliefs.
Which Occupations do Unemployed Workers Target? Insights from Online Job Search Profiles (with S. Altmann, M. Rattenborg and A. Sebald, IZA Discussion Paper No. 16696)
Our study investigates the occupational job search strategies of more than 60,000 unemployed workers in Denmark. We find substantial heterogeneity in how job seekers allocate their search activities across different occupations, and this heterogeneity persists throughout the duration of their unemployment spell. Notably, a considerable proportion of unemployed workers (approximately 30%) search in occupations where they lack relevant experiences. Those aiming for jobs unrelated to their prior experience tend to exhibit the lowest levels of employment and earnings, despite the fact that they target occupations with generally favorable conditions.
Can Statistical Profiling Improve Job Seekers' Reemployment Prospects? (with N. Harmon and M. Rasmussen)
We study the labor market effects of providing newly unemployed workers with information about their heightened risk of long-term unemployment obtained from statistical profiling. Our empirical analysis leverages age discontinuities in the algorithm underlying the profiling tool, enabling us to identify heterogeneous behavioral responses. While the treatment increases employment among young male job seekers, it affects the benefit status of other socio-demographic groups without improving their chances of reemployment. Our findings support the idea that the treatment induces job seekers to update their perceived returns to search, which can either encourage and discourage job search depending on their search costs.