Vacancy Durations and Entry Wages : Evidence from Linked Vacancy-Employer-Employee Data

This paper explores the relationship between the duration of a vacancy and the starting wage of a new job, using linked data on vacancies, the posting establishments and the workers eventually filling the vacancies. The unique combination of large-scale, administrative worker-, establishment- and vacancy-data is critical for separating establishment- and job-level determinants of vacancy duration from worker-level heterogeneity. Conditional on worker observables, we find that vacancy duration is negatively correlated with the starting wage and its establishment component, with precisely estimated elasticities of -0.04 and -0.10, respectively. While the negative relationship is qualitatively consistent with models of wage posting, these elasticities are small, suggesting that firms' wage policies can account only for a small fraction of the variation in vacancy filling across establishments