TY  - RPRT
        AU  - Jäger, Simon
AU  - Roth, Christopher
AU  - Roussille, Nina
AU  - Schoefer, Benjamin
        TI  - Worker Beliefs about Outside Options
        PY  - 2021/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 14963
        UR  - https://www.iza.org/index.php/publications/dp14963
        AB  - Workers wrongly anchor their beliefs about outside options on their current wage. In particular, low-paid workers underestimate wages elsewhere. We document this anchoring bias by eliciting workers' beliefs in a representative survey in Germany and comparing them to measures of actual outside options in linked administrative labor market data. In an equilibrium model, such anchoring can give rise to monopsony and labor market segmentation. In line with the model, misperceptions are particularly pronounced among workers in low-wage firms. If workers had correct beliefs, at least 10% of jobs, concentrated in low-wage firms, would not be viable at current wages.

        KW  - GSOEP
KW  - monopsony
KW  - bias
KW  - beliefs
KW  - wages
KW  - IAB
        ER  -