Journal of Public Economics · 2026 · Marco Caliendo、Robert Mahlstedt、Aiko Schmeißer、Sophie Wagner
Abstract
We study the accuracy of wage expectations among unemployed workers by comparing subjective beliefs to benchmark and realized wages using linked survey-administrative data. On average, jobseekers overestimate their reemployment wages, with optimism concentrated among those with low earnings potential. Beliefs are anchored to past wages, and inaccuracies persist over the course of unemployment and in response to stronger search incentives. Moreover, there is an asymmetry in belief formation: individuals who are likely to experience wage losses relative to their previous job are particularly rigid in adjusting their expectations. Finally, wage optimism predicts higher reservation wages, greater search intensity, and delayed reemployment.