Doctoral Dissertation Research in Economics: Information Asymmetry in Job Search

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This award is funded in whole or in part under the American Rescue Plan Act of 2021 (Public Law 117-2).Wage gaps across race and gender persist among equally educated individuals, and have been attributed in significant part to differences in behavior during job search. Economic theory suggests that access to information about the labor market influences behavior. If information differs across groups, either in quantity or quality, this can lead to differences in job choice. Across race and gender, unequal access to networks and mentoring has been shown to give rise to these information gaps. To test whether access to information contributes to different job search outcomes, the project will conduct an information intervention experiment to assess first whether students of different races and genders have differential information about the labor market. The project will further explore whether an information intervention could change their job search behavior and help bridge the gap in wages. The project will have potential policy implications in considering information intervention as a low-cost process for decreasing gender and racial wage gaps.The project will conduct and experiment that will center on college students in their senior year, who are about to enter the job search process. The treatment group will be provided with information about the starting salary distributions of students from prior years by major, along with reminders about deadlines for employment searches. The control group will only receive the deadline reminders. The project will then examine whether the treatment information changes job search behavior: in particular, the salary of the accepted job, the number and salary of jobs rejected, negotiation behavior, and valuation of non-wage amenities. To account for heterogeneity across demographic groups, stratified random assignment across race, gender, and major will be used to split participants into treatment and control. The results of the study will inform the understanding of both the effect of information on labor search behavior, as well as of the differential impact of information across demographic groups. The results will also help parameterize a labor search model with information asymmetry, where systematic informational differences lead to differences in the reservation wage. The model will allow for estimation of counterfactual scenarios focusing on the impact of narrowing information gaps across groups under heterogeneous labor market conditions.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.