Contracts and on-the-job search

The paper studies a matching model with on-the-job search, transferable utility and heterogeneous agents. Matched agents can set the conditions under which a given match can be dissolved. It is shown that matched agents use sign-off fees to extract all capital gains from trade when a third agent is contacted. In equilibrium, this redistributes wealth towards less able individuals, reduces the likelihood that any given match will be rejected and, given the conditions, it yields efficiency. Although externalities arise when a match is formed and when turnover occurs, the decentralized outcome is efficient when the production function is sub-modular and the difference in abilities is big enough. The results obtained may provide theoretical support for the type of contracts used in some markets, such as sports markets.     

Job search monitoring intensity, unemployment exit and job entry: Quasi-experimental evidence from the UK

Because unemployment benefit reforms tend to package together changes to job search requirements, monitoring and assistance, few existing studies have been able to empirically isolate the effects of job search monitoring intensity on the behaviour of unemployment benefit claimants. This paper exploits periods where monitoring has been temporarily withdrawn during a series of Benefit Office refurbishments — with the regime otherwise unchanged — to allow such identification. During these periods of zero monitoring the hazard rates for exits from claimant unemployment and for job entry both fall.     

Vacancy posting, job separation and unemployment fluctuations

What is the relative importance of hiring and separation in driving unemployment fluctuations? This paper presents a framework to decompose the moments of unemployment and study the respective contributions of vacancy posting, a measure of firms’ hiring efforts, and separation. Separation accounts for about 40% of unemployment's variance, compared to 60% for vacancy posting, and contributes to about 60% of unemployment steepness asymmetry, the fact that unemployment increases faster than it decreases. Further, while vacancy posting is, on average, the most important contributor of unemployment fluctuations, the opposite is true around business cycle turning points, when separation is responsible for most of unemployment movements.     

The cyclical upgrading of labor and on-the-job search

This paper examines patterns of worker reallocation in the search and matching model of the labor market. We show that on-the-job search is crucial for explaining the observed cyclical upgrading of workers to better employment opportunities in booms. This is due to the rising availability of employed searchers which facilitates recruitment for newly created high-wage jobs. The standard model fails to exhibit such behavior. At the same time, the model is consistent with salient features of labor market dynamics, such as the volatility of vacancies and unemployment, and a highly procyclical rate of job-to-job transitions. This suggests an important channel for the reallocation of workers across jobs as well as the propagation of aggregate shocks.     

Local trade networks and spatially persistent unemployment

This paper studies the effects of local trade networks on the spatial distribution of employment in a model that allows for effective demand externalities as well as home bias. It is shown that, if labor can be hired in continuous quantities, then the long run spatial distribution of employment is uniform, and independent of any trade network topology. When labor has binary support, however, local trade networks are found to generate spatial unemployment clusters which can persist indefinitely.     

Bias against overweight job applicants: Further explorations of when and why

We investigated the impact of job candidate weight (average or overweight) on several job‐related ratings following a videotaped mock interview. In ad‐dition to weight, we manipulated the race of the applicant, level of job qual‐ifications, and type of job (e.g., public or private contact). We also measured the effect of rater race and negative affect on multiple work‐relevant ratings. Weight, applicant race, job qualifications, and job type each had a modest but significant impact on ratings of hireability, performance capacity, adapt‐ability, and interpersonal skills, in varying combinations. The implications of these results for practice and future research are provided. © 2007 Wiley Pe‐riodicals, Inc.     

Modelling the process of job search

This paper is concerned with the specification and estimation of a genuinely structural but static model of individual search behaviour in which the estimated reservation wage actually satisfies the optimality condition. The identification of the parameters of interest is achieved by the a priori specification of the vacancy-wage distribution. The model is estimated using the data from the 1978–1979 D.H.S.S. Cohort Study of the Unemployed. The estimated parameters reflect, in the main, our prior views and generate a number of interesting results. In particular the elasticity of unemployment spell duration with respect to unemployment benefits is estimated to be around 0.18–0.26.     

Job search incentives and job match quality

We examine the impacts of time-limited unemployment insurance (UI) and active labor market programs (ALMP) on the duration and outcome of job search in Norway. We use a comprehensive simultaneous equations model accounting for i) the duration of unemployment spells; ii) their outcomes, iii) subsequent employment stability; and iv) the earnings level associated with the first job. We find that time invested in job search pays off in form of higher earnings once a job match is formed. ALMP raises the probability of eventually finding a job as well as expected earnings, but at the cost of lengthening job search.     

The effect of job satisfaction on job search: Not just whether,but also where

Using survey data of public sector employees in the Netherlands, this paper shows that workers' satisfaction with various job domains not only affects whether but also where workers search for another job. An intuitive pattern emerges. Workers try to leave their current employer when they are uncomfortable with an organisation-specific job domain, like management. Conversely, when workers are dissatisfied with a job domain that differs sufficiently across jobs within an organisation, like autonomy, they look for another position in their current organisation. Dissatisfaction with job domains which may have an industry-specific component, such as job duties, drives workers out of their industry. The findings provide a unique view on the relative heterogeneity of job domains across jobs within organisations and industries.     

Temporary jobs and job search effort in Europe

Using longitudinal data on individuals from the European Community Household Panel (ECHP) for eleven countries during 1995-2001, I investigate temporary job contract duration and job search effort. The countries are Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. I construct a search model for workers in temporary jobs which predicts that shorter duration raises search intensity. Calibration of the model to the ECHP data implies that at least 75% of the increase in search intensity over the life of a 2+ year temporary contract occurs in the last six months of the contract. I then estimate regression models for search effort that control for human capital, pay, local unemployment, and individual and time fixed effects. I find that workers on temporary jobs indeed search harder than those on permanent jobs. Moreover, search intensity increases as temporary job duration falls, and roughly 84% of this increase occurs on average in the shortest duration jobs. These results are robust to disaggregation by gender and by country. These empirical results are noteworthy, since it is not necessary to assume myopia or hyperbolic discounting in order to explain them, although the data clearly also do not rule out such explanations.     

Participation in continuous,on-the-job training and the impact on job satisfaction: longitudinal evidence from the German labour market

A number of studies in the human resources literature acknowledge the importance of workplace training for inducing organizational commitment on the part of workers. However, small sample sizes and the absence of relevant panel data have raised concerns about the general validity of results and highlighted the need for further research to explicitly include on-the-job training as an important facet of job satisfaction. A similar empirical gap exists in the economics and industrial organization literature, where, despite the importance of both on-the-job training and job satisfaction to influence labour productivity, the relationship between the two has received surprisingly little attention. The aim of this paper is to bridge this gap in our knowledge and assess the impact of further training on job satisfaction in the western regions of Germany. We use data derived from the German Socio-economic Panel, which covers the period 1984 to 2002. Concentrating on full-time employed individuals, we focus in particular on the 1989, 1993 and 2000 interview waves, which include a number of questions on work-related training and offer detailed information on the type and duration of training received, and whether employers sponsored such training. The empirical results of the study provide information about the decision to participate in further training and the latter's impact on job satisfaction. Gender inequality issues in Germany's segmented labour market are explained by reference to discrepancy theory, equity theory, social exchange theory and the perception of a breach in the psychological contract between firms and female trainees.     

On-the-job search and cyclical unemployment: Crowding out vs. vacancy effects

Incorporating on-the-job search (OTJS) into a real business cycle model has been shown to increase the cyclical volatility of unemployment. Using a particularly simple model of OTJS, we show that the increased search of employed workers during expansions induces firms to open more vacancies, but also crowds out unemployed workers in the job search, resulting in an ambiguous overall effect on unemployment volatility. We show analytically and numerically that the difference between the employer׳s share of the match surplus with an employed versus an unemployed job seeker determines the degree to which OTJS increases unemployment volatility. We use this result to re-consider some related papers of OTJS and explain the amplification of volatility they obtain. Finally, we show that a plausible calibration of the OTJS model allows us to reproduce most significant features of the US labor data.     

Employment contracts,job search theory,and labour turnover: Preliminary empirical: Results

The empirical implications of a model in which a worker participates in a labour market in which a job offer consists of a wage-hour pair are examined. Here, hours are not freely adjustable and the wage rate is typically different from the marginal value of leisure. A theoretical model is proposed; some natural conjectures on effects of wage changes are shown not to hold; and a preliminary empirical investigation based on Denver Income Maintenance Experiment data is undertaken.     

Employment effects of extended geographic scope in job search

This paper uses a unique possibility to link unemployed individuals' stated willingness to move for work with administrative data, giving us the possibility to analyse the effects of individual willingness-to-move on labour market outcome. Those with extended geographic job search area have a higher probability of finding a job. However, the greatest effect is found on the local labour market, indicating that it is not the extended geographic scope per se that increases the likelihood of escaping unemployment, but differences in unobservable characteristics between those who use an extended search area and those who do not.     

Employee recruitment and job search: Towards a multi-level integration

This study describes an attempt to develop an integrative model of job search and employee recruitment. Inevitably multi-level in nature, the model demonstrates the interplay between organizational-level factors and individual-level factors in influencing the outcomes of employee recruitment and job search activities. According to the model, influenced by job seeker and organizational characteristics, job search and recruitment activities jointly create job awareness, which is the first step in organizational attraction. Next, depending on the job seeker's current job situation, this attraction leads to job pursuit intention and behavior. The model also emphasizes the longitudinal nature of the process by which individuals gain employment. Finally, since each organization's applicant pool consists of job seekers with some common characteristics attracted to the same position, the model proposes that recruitment and job search can be examined by utilizing a multilevel framework.     

Discrimination,technology and unemployment

I study the interaction between discrimination and investment using a directed search model where firms decide the capital intensity of their production technologies before being matched. Discrimination makes some workers cheap to hire. As a consequence, some firms might save on capital costs adopting labour intensive technologies. This framework allows one to reconcile search models with three well-known facts regarding the labour market outcomes of minority workers: low wages, high unemployment and occupational segregation. Furthermore, the model questions the role of equal pay legislation in reducing inequality since removing this restriction, i.e., allowing firms to post type-contingent wages, eliminates the negative effects of discrimination on investment and wages.     

A simultaneous model of workplace and residential location incorporating job search

The paper develops a model of spatial job search to provide a theory of workplace location with respect to a predetermined place of residence which, the paper argues, is needed to complement the theory of residential location from a predetermined workplace. By concentrating on the role of the skill level of the job seeker, the model distinguishes predictions of the workplace location based on search from those based on commuting considerations. Household survey data from Greater London is analyzed to support the propositions of the search model in the determination of the relationship between the workplace and the household location.     

Growth,unemployment and heterogeneity

The paper analyzes unemployment in a medium-run growth model, where aggregate demand and supply interact, using a top-down approach. The aim of the essay is the study of a nonlinear system where both aggregate demand and supply are endogenous and generate bounded unemployment, followed by a methodological effort direct to identify possible lines of convergence with the agent based models (ABM) approach. This is a by-product of the presence of heterogeneity in the model. Heterogeneity acts through two different channels and operates among class of agents: it comes into the aggregate consumption function where households are assumed employed or unemployed; it changes the learning process of pessimists and optimists. The analysis is carried on through simulations. The resulting system is fairly stable to changes in main structural parameters. On one hand, autonomous demand drives the dynamics of the system, while heterogeneity in the consumption function, due to the presence of unemployment, strengthens the links with supply aspects. On the other hand, both the rate of growth of labor productivity and labor supply are endogenous. Two major results are obtained. First, unemployment allows the so called Harrodian reconciliation between aggregate demand and supply. Second, unemployment remains bounded meaning that the interaction between aggregate demand and supply thwarts instability. These results are in keeping with those obtained by means of a bottom-up approach, typical of ABM. Possible explanations and implications of this convergence are put forward and open the venue to further deepening of complementarities among the two modeling strategies.

     

Trade, migration and regional unemployment

A by now large literature in regional economics has greatly improved our understanding of the determinants of the observed spatial disparities in productivity. However, this literature neglects what seems to be a robust and persistent fact accompanying regional productivity differences: high productivity regions also have lower unemployment than low productivity regions. In this paper, we set out a model in the New Economic Geography (NEG)/job search tradition to explore the theoretical determinants of this fact. We find that the same forces producing regional agglomeration and productivity differences also generate persistent unemployment disparities. Moreover, we highlight a contrast between the short-run and long-run effects of migration on regional unemployment. In particular, migration from the periphery to the core may reduce unemployment disparities in the short-run, but exacerbates them in the long-run.     

Hunting while working: An expanded model of employed job search

Major theoretical models of job search fail to consider the changing nature of careers, the influence of the internet as a job search tool, and the diverse objectives for employed job search. Consequently, the study of employed job search has been largely confined to turnover research. We add to existing theory by providing a typology of employed search objectives based on modifying employment conditions (separation-seeking, change-seeking, leverage-seeking), contagion (mimetic-seeking) and employability (knowledge-seeking, network-seeking) and offer propositions related to the antecedents and implications for each objective. This classification offers an alternative explanation for previous research findings, provides a framework for future study, and has practical implications for employee retention and recruitment.