Stone Inequality & Social Policy Seminar: Sydnee Caldwell

Firm Pay and Worker Search

Sydnee Caldwell, Assistant Professor, UC Berkeley

Abstract: Whether and how workers search on the job depends on their beliefs about pay in other firms. Yet little is known about workers’ knowledge of outside pay. We use a large-scale survey of full-time German workers, linked to their Social Security records, to elicit pay expectations and preferences over specific outside firms. Workers believe that they face considerable heterogeneity in their outside pay options, and direct their search toward firms they believe would pay them more. Workers’ expected firm-specific pay premia are highly correlated with pay policies observed in administrative records and with workers’ valuations of firm-specific amenities. Most workers are unwilling to search for a new job—or leave their current firm—even for substantial pay increases. Switching costs are equivalent to 40% of a worker’s annual pay. Attachment varies across firms, and cannot be explained by either differences in firm specific amenities or switching costs.

Sydnee Caldwell is an assistant professor in the Economic Analysis and Policy Group at the Haas School of Business and an assistant professor in the Department of Economics at UC Berkeley. Caldwell’s research focuses on topics in labor and personnel economics. Caldwell received a PhD in economics from the Massachusetts Institute of Technology in 2019 and a BA in applied mathematics and economics from UC Berkeley in 2012. She is the 2019 winner of the W.E. Upjohn Institute for Employment Research dissertation prize and was chosen as a participant in the 2019 Review of Economic Studies European Tour. Before joining UC Berkeley she was a post-doctoral researcher at Microsoft Research New England.

Due to building access restrictions, if you do not have a Harvard ID and wish to attend, you must email inequality@hks.harvard.edu to receive permission.