Job Search with Nonparticipation

Paul Frijters and Bas van der Klaauw

No 1407, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In a non-stationary job search model we allow unemployed workers to have a permanent option to leave the labor force. Transitions into nonparticipation occur when reservation wages drop below the utility of being nonparticipant. Taking account of these transitions allows the identification of duration dependence in the job offer arrival rate and the wage offer distribution. We estimate the structural model with individual data from the German Socio- Economic Panel and use simulated maximum likelihood. The results show that the presence of significant negative duration dependence in the wage offer distribution causes reservation wages to decrease. The rate at which job offers arrive is constant over the unemployment duration. These findings provide micro evidence that the job search environment of unemployed workers is non-stationary because of loss of skills.

Keywords: endogenous nonparticipation; non-stationary job search; duration (search for similar items in EconPapers)
JEL-codes: C15 J24 J41 J64 J68 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2004-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Economic Journal, 2006, 116 (508), 45-83

Downloads: (external link)
https://docs.iza.org/dp1407.pdf (application/pdf)

Related works:
Journal Article: Job Search with Nonparticipation (2006)
Working Paper: Job Search with Nonparticipation (2003)
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:iza:izadps:dp1407

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().