Econometrica: Jul 2022, Volume 90, Issue 4

Job Search Behavior among the Employed and Non-Employed

https://doi.org/10.3982/ECTA18582
p. 1743-1779

R. Jason Faberman, Andreas I. Mueller, Ayşegül Şahin, Giorgio Topa

We develop a unique survey that focuses on the job search behavior of individuals regardless of their labor force status and field it annually starting in 2013. We use our survey to study the relationship between search effort and outcomes for the employed and non‐employed. Three important facts stand out: (1) on‐the‐job search is pervasive, and is more intense at the lower rungs of the job ladder; (2) the employed are at least three times more effective than the unemployed in job search; and (3) the employed receive better job offers than the unemployed. We set up a general equilibrium model of on‐the‐job search with endogenous search effort, calibrate it to fit our new facts, and find that the search effort of the employed is highly elastic. We show that search effort substantially amplifies labor market responses to productivity shocks over the business cycle.



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Supplement to "Job Search Behavior among the Employed and Non-Employed"

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