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  5. Job Search, Wages, and Inflation

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Job Search, Wages, and Inflation

  • Laura Pilossoph
  • Jane M. Ryngaert
American Economic Review (Forthcoming)

Abstract

How do inflation expectations affect the job search behavior of workers when wages are set in nominal terms? A canonical job search model incorporating nominal wage rigidities predicts that on-the-job search should increase with expected inflation. Using novel survey questions, we show that workers are more likely to search at higher values of hypothetical inflation. In the Survey of Consumer Expectations, within-respondent variation in inflation expectations predicts on-the-job search.

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