Non-Wage Job Characteristics and the Case of the Missing Margin

Abstract

I use the NLSY79 to estimate a job search model that distinguishes the relative importance of hiring wages, on-the-job wage growth potential and non-wage characteristics in workers' job choices. I find that non-wage characteristics are more important than initial hiring wages in determining job choices. To demonstrate the importance of accounting for non-wage characteristics and wage dynamics when evaluating public policies, I apply this model to estimate how workers value the improved non-wage characteristics and on-the-job wage growth potential that result when unemployment insurance enables them to search longer.