Perceived returns to job search

Abstract

This paper provides new evidence on workers’ perceptions of the returns to job search effort using hypothetical vignettes. This allows us to overcome limitations with survey data on realized behavior in which search effort and reservation wages may be endogenous to perceived job finding rates. The perceived job finding probability is nearly linear in hours searched and only slightly concave for most respondents. While workers are over-optimistic about the probability of receiving a job offer conditional on any search, they perceive th Show more