Search and Nonwage Job Characteristics

Abstract

This paper quantifies the importance of non-wage job characteristics to workers by estimating a structural on-the-job search model. The model generalizes the standard search framework by allowing workers to search for jobs based on both wages and job-specific non-wage utility flows. Within the structure of the search model, data on accepted wages and wage changes at job transitions identify the importance of non-wage utility through revealed preference. The parameters of the model are estimated by simulated minimum distance using the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97). The estimates reveal that utility from non-wage job characteristics plays an important role in determining job mobility, the value of jobs to workers, and the gains from job search. More specifically, non-wage utility accounts for approximately one-third of the total gains from job mobility. These large non-pecuniary gains from search are missed by search models which assume that the wage captures the entire value of a job to a worker.

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