Working Paper: NBER ID: w1861
Authors: Harry J. Holzer
Abstract: This paper presents evidence that young unemployed job seekers choose higher levels of search effort (as measured by numbers of methods used and time spent per method) and lower relative reservation wages than do comparable employed seekers. The unemployed also have higher probabilities of gaining new employment, which reflect higher probabilities of receiving offers and especially higher probabilities of accepting them; as well as slightly lower wages.These differences in outcomes between the two groups are at least partly explained by differences in their respective search choices.The evidence thus suggests that unemployed job seekers have higher costs of search (from foregone earnings) than do the employed, causing the former to seek new jobs more eagerly.
Keywords: Job Search; Youth Employment; Labor Economics
JEL Codes: J64; J65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher costs of being unemployed (J65) | lower relative reservation wages (J39) |
| higher search effort (D83) | higher probabilities of gaining new employment (J68) |
| lower reservation wages (J31) | higher acceptance rates of job offers (M51) |
| higher search effort (D83) | higher job acquisition rates (J68) |