Non-Wage Job Characteristics And The Case of The Missing Margin

Job search models typically describe jobs in terms of wages without accounting for other characteristics, but empirical evidence suggests non-wage characteristics are an important determinant of job choice. For instance, workers in the NLSY79 report moving from a higher paying job to a lower paying job in 33% of voluntary job-tojob transitions. I estimate an equilibrium-based job search model that accounts for hiring wages, on-the-job wage growth, non-wage job characteristics, and measurement error. This model provides the rst known estimate of the cumulative importance of all non-wage characteristics in job market decisions. I nd that variation across jobs in non-wage characteristics is roughly twice as important as variation in hiring wages. I use the model and estimated parameters to measure how workers value the better non-wage characteristics and on-the-job wage growth potential that result when unemployment insurance enables them to search longer. Accounting for these previously unmeasured bene ts more than triples my estimate of the program's value to workers.