Ignorance is bliss? Rejection and discouragement in on-the-job search

Rocco Zizzamia

No 2025-06, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Searching for jobs often involves repeated rejection. If discouraged searchers reduce search effort in response, this decreases their probability of finding a (good) match, with negative implications for the individual searcher and for the efficiency with which talent is allocated to jobs in general. Using a lab-in-the-field experiment with young workers in South Africa, I examine whether experiencing repeated rejection discourages further search. Participants repeatedly choose between two tasks: a high-return task with frequent feedback containing rejection signals, and a low-return task without immediate rejection feedback. By experimentally varying monetary rewards and rejection exposure, while controlling for learning and risk preferences, I isolate the psychological cost of rejection as a driver of search behaviour. I find that subjects choose to reduce their expected earnings to avoid rejection signals. This behaviour suggests that rejection imposes a psychological cost that motivates active information avoidance and decreases job search.

JEL-codes: D91 J63 J64 (search for similar items in EconPapers)
Date: 2025
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