EconPapers    
Economics at your fingertips  
 

Re-employment expectations and realisations: Prediction errors and behavioural responses

Sonja Kassenboehmer and Sonja G. Schatz

Labour Economics, 2017, vol. 44, issue C, 161-176

Abstract: Using a nationally representative panel dataset, this study investigates the extent and impact of systematic misconceptions that the currently unemployed have about their prospect of re-employment. Such biased expectations are of interest because of their capacity to drive sub-optimal labour market behaviour. Specifically, people with unemployment experience of three to five years significantly underestimate their probability of re-employment. Simply having information about the individuals' previous unemployment experience is sufficient to produce more accurate predictions than those of the individuals themselves. People who underestimate their re-employment probability are less likely to search actively for a job and more likely to exit the labour force. If re-employed, they are more likely to accept lower wages, work fewer hours, work part-time and experience lower levels of life satisfaction. By improving the accuracy of re-employment expectations, employment agency caseworkers may use this information to enhance their clients' labour market decision-making and prevent adverse job-seeking behaviours.

Keywords: Job insecurity; Re-employment expectations; Prediction errors (search for similar items in EconPapers)
JEL-codes: J64 J01 D84 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537116304122
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:44:y:2017:i:c:p:161-176

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-09-14
Handle: RePEc:eee:labeco:v:44:y:2017:i:c:p:161-176