Evidence on Job Search Models from a Survey of Unemployed Workers in Germany

Stefano DellaVigna, Jörg Heining, Johannes Schmieder and Simon Trenkle

No 27037, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To better understand the underlying mechanisms, we conducted a large text-message-based survey of unemployed workers in Germany. We surveyed 6,349 UI recipients twice a week for 4 months about their job search effort. The panel structure allows us to observe how search effort evolves within individuals over the unemployment spell. We provide three key facts: 1) search effort is flat early on in the UI spell, 2) search effort exhibits an increase up to UI exhaustion and a decrease thereafter, 3) UI recipients do not appear to time job start dates to coincide with the UI exhaustion point. A standard search model with unobserved heterogeneity struggles to explain the second fact, and a model of storable offers is not consistent with the third fact. The patterns are well captured by a model of reference-dependent job search or by a model with duration dependence in search cost.

JEL-codes: D9 J64 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-gen, nep-ias, nep-lab and nep-ore
Note: LS PE
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Citations: View citations in EconPapers (24)

Published as Stefano DellaVigna & Jörg Heining & Johannes F Schmieder & Simon Trenkle, 2022. "Evidence on Job Search Models from a Survey of Unemployed Workers in Germany," The Quarterly Journal of Economics, vol 137(2), pages 1181-1232.

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Related works:
Journal Article: Evidence on Job Search Models from a Survey of Unemployed Workers in Germany (2023)
Working Paper: Evidence on job search models from a survey of unemployed workers in Germany (2020)
Working Paper: Evidence on Job Search Models from a Survey of Unemployed Workers in Germany (2020)
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