Directed Search with Phantom VacanciesReport as inadecuate




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1 Department of Economics, Georgetown University 2 IZA - Institute for the study of labor 3 GREQAM - Groupement de Recherche en Économie Quantitative d-Aix-Marseille

Abstract : When vacancies are filled, the ads that were posted are generally not withdrawn, creating phantom vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age for otherwise identical listings and so equalize the probability of matching across listing age. Forming a match with a vacancy of age a creates a phantom of age a and thus creates a negative informational externality that affects all vacancies of age a or older. The magnitude of this externality decreases with a. The directed search behavior of job seekers leads them to over-apply to younger listings. We calibrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation.

Keywords : directed search information persistence vacancy age





Author: James Albrecht - Bruno Decreuse - Susan Vroman -

Source: https://hal.archives-ouvertes.fr/



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