DP13249 Vacancy Durations and Entry Wages: Evidence from Linked Vacancy-Employer-Employee Data
This paper explores the relationship between the duration of a vacancy and the starting
wage of a new job, using unusually informative data comprising detailed information
on vacancies, the establishments posting the vacancies, and the workers eventually filling
the vacancies. We find that vacancy durations are negatively correlated with the
starting wage and that this negative association is particularly strong with the establishment
component of the starting wage. We also confirm previous findings that growing
establishments fill their vacancies faster. To understand the relationship between establishment
growth, vacancy filling and entry wages, we calibrate a model with directed
search and ex-ante heterogeneous workers and firms. We find a strong tension between
matching the sharp increase in vacancy filling for growing firms and the response of
vacancy filling to firm-level wages. We discuss the implications of this finding as well
as potential resolutions.
