Determinants of on-the-job Search Behavior: An Empirical Analysis

Tamás Bakó

doi:10.13189/aeb.2015.030102

Abstract

The primary aim of this paper was to shed light on the impact of subjective alternative wage, wage changes and wage discrimination on job search behavior of employees. The research was based on primary data; the survey was conducted among Hungarian internet user employees. Our results suggest that regardless of their job search behavior employees are aware of alternative wages, which have the greatest impact on intentions to quit and active search. With respect to wage cut and wage increase we have found that they are both significant; the former has strong positive effect on intentions to quit and active search, while the latter reduces the probability of on-the-job search. To our best knowledge, this study was the first to reveal direct impact of wage discrimination on job search behavior of employees according to which there is a weak, but positive effect on intentions to quit and active search. Last but not least, the results of our study confirm the role of non-financial incentives in job search, where superior-subordinate relationships have a special importance.

Highlights

Job mobility plays an essential role in the correction of imperfect job match; it is a mechanism that can foster the optimal allocation of human resources
Before examining the factors influencing on-the-job search behavior, we have to understand whether only employees looking for a job are aware of available alternative wages, or whether employees generally have an idea of what the elsewhere potentially accessible wages are
We examined factors influencing on-the-job search with a special focus on subjective alternative wage, change in wage level and wage discrimination based on a representative sample of Hungarian internet-user employees aged between 18 and 65

Summary

Introduction

Job mobility plays an essential role in the correction of imperfect job match; it is a mechanism that can foster the optimal allocation of human resources. One of the most important driving factors for on-the-job search is the difference between the own-wage and the alternative wage. Based on industry level wages, Shorey [18] found that quits are positively influenced by the form of the external wage distribution, represented by its mean and variance. Black [21] found that the coefficient is significantly positive for the difference between the own-wage and the wage predicted by individual and firm characteristics, which proves that employees react to other potential wages; the higher the available wage the more likely the worker to look for other jobs. The shortcoming of the above-mentioned studies is that they predicted the individual behavior based on industry-level wages or estimated alternative wages; they only provide for an indirect evidence on its impact.

Objectives

Results

Conclusion