Worker Perceptions of Employment Risk: Consequences for Wages, Job Search, and Separation Rates

Last registered on November 15, 2024
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Pre-Trial

Trial Information

General Information

Title
Worker Perceptions of Employment Risk: Consequences for Wages, Job Search, and Separation Rates
RCT ID
AEARCTR-0014781
Initial registration date
November 06, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 15, 2024, 1:33 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name
Ishaana Talesara
Affiliation
Massachusetts Institute of Technology
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Other Primary Investigator(s)

PI Name
Lukas Lehner
PI Affiliation
University of Edinburgh
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PI Name
Arthur Wickard
PI Affiliation
Massachusetts Institute of Technology
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Additional Trial Information

Status
In development
Start date
2024-11-07
End date
2025-06-04
Keywords
Labor
Additional Keywords
Job loss, Unemployment, Job search, Employment risk, Compensating differentials, Job amenities
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Job loss is one of the most costly economic risks workers are exposed to throughout their lifetimes, and firms vary widely in their separation rates. Workers' ability to perceive differences in employment risk across jobs affects sorting of workers to firms, compensating differentials for risk, and firm layoff decisions. Do workers accurately perceive the relative historical employment risk of different jobs? Does changing beliefs about historical firm risk affect beliefs about future personal risk and job search behavior? What are the implications of potential misperceptions for wages and separation rates? In this project, we survey jobseekers in Lower Austria to (1) compare beliefs about historical layoff rates to the true rates and (2) use an information provision experiment to study the effect of correcting misperceptions of historical employment risk on beliefs and job search behavior. Finally, we will use our estimates from the survey along with a model to quantify the effects of correcting misperceptions on wages, separation rates, and the allocation of workers to firms.
External Link(s)

Registration Citation

Citation
Lehner, Lukas, Ishaana Talesara and Arthur Wickard. 2024. "Worker Perceptions of Employment Risk: Consequences for Wages, Job Search, and Separation Rates." AEA RCT Registry. November 15. https://doi.org/10.1257/rct.14781-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2024-11-07
Intervention End Date
2025-06-04

Primary Outcomes

Primary Outcomes (end points)
Beliefs, search effort index, choice of resume tips, choice of job postings, reported application intentions/behavior
Primary Outcomes (explanation)
We want to study how learning about the relative layoffs at different types of firms in the past affects beliefs of participants job loss risk in the future. We also want to study whether changing beliefs affects search behavior.

Secondary Outcomes

Secondary Outcomes (end points)
Employed at treated type of firm, accepted/declined/received a job at treated type of firm, perceived layoff rate at new firm, search effort to trait 1.
Secondary Outcomes (explanation)
Treatment that affects job search may also affect downstream labor market outcomes, though we may not be powered to detect these

Experimental Design

Experimental Design
Participants are sent a survey via email. They are asked questions about their beliefs about the historical layoffs at the firm they previously worked at. Participants are then randomly assigned to one of three treatment arms: size, industry, or temp agency. Within the arm, participants are randomized to be treated or not. All participants will be anchored to the average 2023 layoff rate associated with one trait (“trait 1”) and then asked their prior beliefs about the historical layoff rate of the other trait (“trait 2”). Treated individuals will be provided with the accurate historical layoff rate for trait 2. Which of the two traits is the anchor and which trait is the treatment will be randomly selected for each participant. (e.g., some participants may be anchored to large firms and some participants may be anchored to the layoff rate for small firms). The traits are:
1. Size: large and small
2. Industry: industry of most recent job (reported by the participant) and industry of most common industry transition from current industry
3. Temp agency: industry of most recent job (reported by the participant) and temp agency employees who had previously worked in the participant’s former industry before unemployment (and then transitioned to working at a temp agency)
Participants are then asked about their beliefs about their personal risk if they were to find jobs at different types of firms. Finally, we measure search effort and application intentions. Participants are sent a follow up survey two weeks later. In this second survey, we re-elicit posterior beliefs and survey participants about their job search behavior over the previous two weeks. We observe participants' ultimate job placement and wages in the subsequent months in linked data.
Experimental Design Details
Not available
Randomization Method
Randomization done by Qualtrics
Randomization Unit
Treatments are randomized at the individual level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
n/a
Sample size: planned number of observations
4000 (survey will be sent via email to ~40,000, sample size depends on take-up)
Sample size (or number of clusters) by treatment arms
2000 control, 2000 treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
WU Ethics Board, Vienna University of Economics and Business
IRB Approval Date
2024-07-08
IRB Approval Number
WU-RP-2024-023
Analysis Plan

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