TY  - RPRT
        AU  - Caliendo, Marco
AU  - Mahlstedt, Robert
AU  - Schmeißer, Aiko
AU  - Wagner, Sophie
        TI  - The Accuracy of Job Seekers' Wage Expectations
        PY  - 2024/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17198
        UR  - https://www.iza.org/publications/dp17198
        AB  - We study the accuracy of job seekers' wage expectations by comparing subjective beliefs to objective benchmarks using linked administrative and survey data. Our findings show that especially job seekers with low objective earnings potential and those predicted to face a penalty compared to their pre-unemployment wage display overly optimistic wage expectations. Moreover, wage optimism is amplified by increased job search incentives and job seekers with overoptimistic wage expectations tend to overestimate their reemployment chances. We discuss the labor market implications of wage optimism, as well as the role of information frictions and motivated beliefs as sources of overoptimism.

        KW  - subjective expectations
KW  - objective benchmarks
KW  - job search
KW  - unemployment
KW  - reemployment wages
        ER  -