Working Papers
What Do Jobseekers Want? Estimating Reservation Wages and the Value of Job Attributes
No.
1414
Publisher
ERF
Date
November, 2020
Topic
J3. Wages, Compensation, and Labor Costs
Understanding jobseeker preferences, including their reservation wages and how much they value different non-wage amenities, is difficult because these parameters are not directly observable. We run an experiment at a job matching center in which we test four different methods for estimating these parameters. We find large and important differences between the methods, with the method most commonly used in household and labor force surveys - open ended questions - performing worst, and a short set of discrete choices performing best. We then use the data to estimate job seekers’ valuations of different job attributes and explore how valuations differ by job seeker characteristics such as gender, education and duration of unemployment. Among other findings, we show that in our sample of jobseekers in Egypt, women are more sensitive to long commutes and value flexible schedules more than men. These finds have important implications for researchers who use and collect data on reservation wages and for policymakers and employers who aim to decrease matching frictions.
Authors
Brian Feld
Assistant Professor, School of Economics and Finance,...
Authors
Abdelrahman Nagy
Director of Learning and Strategy, Sawiris Foundation...
Research Fellows
Adam Osman
Assistant Professor, University of Illinois