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Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit

John Nunley (), Adam Pugh, Nicholas Romero and Richard Seals

No auwp2015-13, Auburn Economics Working Paper Series from Department of Economics, Auburn University

Abstract: We use data from a résumé audit to estimate the impact of unemployment and underemployment on the employment prospects facing recent college graduates. We find no statistical evidence of negative duration dependence associated with unemployment spells for recent college graduates. Alternatively, college graduates who are underemployed have callback rates that are 30 percent lower than that for applicants who are adequately employed. The adverse effects of underemployment are robust across cities with different labor-market conditions. Internship experience obtained while completing one's degree reduces the negative effects of underemployment substantially. We conclude that underemployment serves as a strong, negative signal to prospective employers.

Keywords: Unemployment; Underemployment; Duration Dependence; Labor Demand; Employment; Internships; Field Experiments; Correspondence Studies; Résumé Audit (search for similar items in EconPapers)
JEL-codes: J23 J24 J60 (search for similar items in EconPapers)
Date: 2015-09
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