Working Paper: NBER ID: w24200
Authors: Gregor Jarosch; Laura Pilossoph
Abstract: This paper models a frictional labor market where employers endogenously discriminate against the long term unemployed. The estimated model replicates recent experimental evidence which documents that interview invitations for observationally equivalent workers fall sharply as unemployment duration progresses. We use the model to quantitatively assess the consequences of such employer behavior for job finding rates and long term unemployment and find only modest effects given the large decline in callbacks. Interviews lost to duration impact individual job-finding rates solely if they would have led to jobs. We show that such instances are rare when firms discriminate in anticipation of an ultimately unsuccessful application. Discrimination in callbacks is thus largely a response to dynamic selection, with limited consequences for structural duration dependence and long term unemployment.
Keywords: No keywords provided
JEL Codes: E24; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| discrimination (J71) | callbacks (Y10) |
| unemployment duration (J64) | callbacks (Y10) |
| discrimination (J71) | job finding rates (J68) |
| structural component of duration dependence (C41) | overall decline in job finding rates (J68) |
| statistical discrimination against the long-term unemployed (J79) | job finding rates (J68) |