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What Drives Job Search? Evidence from Google Search Data

Scott Baker () and Andrey Fradkin ()
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Andrey Fradkin: Economics Department, Stanford University

No 10-020, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: The large-scale unemployment caused by the Great Recession has necessitated unprecedented increases in the duration of unemployment insurance (UI). While it is clear that the weekly payments are beneficial to recipients, workers receiving benefits have less incentive to engage in job search and accept job offers. We construct a job search activity index based on Google data which provides the first high-frequency, state-specific measure of job search activity. We demonstrate the validity of our measure by benchmarking it against the American Time Use Survey and the comScore Web-User Panel, and also by showing that it varies with hypothesized drivers of search activity. We test for search activity responses to policy shifts and changes in the distribution of unemployment benefit duration. We find that search activity is greater when a claimant's UI benefits near exhaustion. Furthermore, search activity responses to the passage of bills that increase unemployment benefits duration are negative but short-lived in most specifications. Using daily data, we estimate that an increase by 1% of the population of unemployed receiving additional benefits results in a decrease in aggregate search activity of 1.7% lasting only one week.

Keywords: Job Search; Unemployment; Unemployent Insurance; Moral Hazard; Internet Search (search for similar items in EconPapers)
JEL-codes: E24 E65 H53 H73 J21 J64 J65 J68 J08 J60 L8 (search for similar items in EconPapers)
Date: 2011-04
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