Research

Working Papers

1. How much are candidates willing to pay for more openings and higher chances of getting the job? Evidence from Civil Service Exams

   Abstract

   I document that job seekers have intrinsic preferences over the competitiveness of getting the job positions they apply for in a high-stakes, real-world setting. I do this by leveraging a unique natural setting in Brazil where job applicants apply for government positions using a Deferred Acceptance Algorithm. Because the algorithm is incentive compatible, applicants’ rankings of positions should reflect the positions' competitiveness only through their true preferences. I estimate these preferences using two measures: the probability that each candidate is matched with a certain job and the number of openings available for a particular position. My estimates imply that high-performing candidates are willing to pay, on average, 3.6 to 5.7 percent of the earnings provided by a job posting to increase their matching probability by 10 percentage points and 0.2 to 2.3 percent to have 10 additional openings in a job posting. These results suggest that application procedures reveal a desire to avoid competitive job positions not only due to application costs, but also because individuals have direct preferences over the difficulty of obtaining a job.

2. Rank vs Money: Evidence from Managers

   with Collin Raymond and Julia Shvets (new draft available soon!)

   Abstract

   We study the existence and relative importance of status concerns compared to financial incentives among managers in a large firm where the bonus is determined through a high powered tournament. Using detailed data about both performance and labour input decisions, we consider managers’ response to feedback about their rank as well as monetary bonuses. We find that managers exhibit rank concerns that are distinct from, but co-exist with, financial performance incentives. These rank concerns are important: moving from the bottom to the top of the firm’s ranking is worth up to $4,500 a year to the average manager, or 48% of their annual performance bonus. Moreover, managers exhibit desire to catch up (i.e., utility is concave in rank): when managers get a bad rank they respond by improving performance, rather than getting discouraged. Our data allow us to identify these effects using both outputs (performance) as well as inputs (staffing decisions) of the managers.

Work in Progress

1. The Price of Liquidity: The Welfare effects of early access to Mandatory Severance Savings

   with João von Montfort Kling