Job Seekers’ Beliefs and Preferences over Wages and Benefits: Experimental Evidence from Online Job Boards

We estimate how strongly job seekers value wages and job benefits, how well informed they are about compensation differences across employers, and how much they update their beliefs when shown such information. In a field experiment, we randomly embed wage and benefit information from an employerreview platform on job ads for 265,000 users of a Swiss job-board network. The revealed-preference estimates suggest that a 1% higher posted wage increases clicks to view and engage with the ad by 0.4%. A conceptual framework decomposes this elasticity into preferences, prior knowledge, and belief updating, which we identify through a belief-elicitation experiment with users from the same job boards. We find that job seekers underestimate wage differences across jobs by half, know little about benefit differences, and update beliefs only partially. Accounting for these information frictions, the implied ownwage elasticity of applications is 2.5–2.9. Among the twelve benefits shown across the experiment, job seekers value four significantly: a company car (10% of wages), work from home (8%), firm-sponsored childcare (6%), and a parking spot (4%). The average position offers benefits worth 11% of wages. Because higher-paying jobs offer more benefits, inequality in total compensation exceeds wage inequality.