Abstract
Economists frequently rely on stated-choice experiments to estimate workers' willingness to pay (WTP) for job amenities that lack explicit market prices. These methods rest on the assumption that workers evaluate each job attribute in isolation. We test this assumption in a large-scale discrete choice experiment, embedding an amenity whose market price provides a known upper bound on its monetary value. Workers' stated WTP for the amenity is inflated substantially relative to its price, even though WTP estimates for other, unpriced amenities match those in the literature. The inflated WTP is consistent with the idea that listed job amenities act as signals: the presence of one feature leads workers to infer changes in other, unlisted aspects of the job. We confirm this mechanism in a belief-elicitation experiment, showing that the presence of amenities in a job ad causally shifts perceptions of pay and firm quality along unrelated dimensions. In turn, we document that the money metric in discrete choice experiments itself is contaminated by changes in worker beliefs about the employer in response to changes in posted wages. We explore the equilibrium implications of these findings for the valuation of non-wage amenities and for estimates of monopsony power derived from job choice models.
Speaker
Jonas Jessen is a postdoctoral research fellow at the WZB in Berlin in the research group “Inequality, social mobility and growth”. He is also associated with the IAB, CESifo and the Berlin School of Economics. His research is focused on labor economics, with an emphasis on gender and family aspects. His research has been published in numerous high ranking journals, like the Review of Economic Studies, the Economic Journal, the AEJ Applied or the Journal of Politics. Currently, he is working on a broad range of topics like job search, AI adoption, or sexual harassment in the workplace.
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