Job Seekers' Perceptions and Employment Prospects: Heterogeneity, Duration Dependence, and Bias
Johannes Spinnewijn () and
Giorgio Topa ()
American Economic Review, 2021, vol. 111, issue 1, 324-63
This paper uses job seekers' elicited beliefs about job finding to disentangle the sources of the decline in job-finding rates by duration of unemployment. We document that beliefs have strong predictive power for job finding, but are not revised downward when remaining unemployed and are subject to optimistic bias, especially for the long-term unemployed. Leveraging the predictive power of beliefs, we find substantial heterogeneity in job finding with the resulting dynamic selection explaining most of the observed negative duration dependence in job finding. Moreover, job seekers' beliefs underreact to heterogeneity in job finding, distorting search behavior and increasing long-term unemployment.
JEL-codes: D83 E24 J22 J64 J65 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (29) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to AEA members and institutional subscribers.
Working Paper: Job seekers’ perceptions and employment prospects: heterogeneity, duration dependence, and bias (2021)
Working Paper: Job Seekers' Perceptions and Employment Prospects: Heterogeneity, Duration Dependence and Bias (2019)
Working Paper: Job Seekers' Perceptions and Employment Prospects: Heterogeneity, Duration Dependence and Bias (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:111:y:2021:i:1:p:324-63
Ordering information: This journal article can be ordered from
Access Statistics for this article
American Economic Review is currently edited by Esther Duflo
More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().