Job Search Behavior over the Business Cycle

We create a novel measure of job search effort exploiting the American Time Use and Current Population Surveys. We examine the cyclicality of search effort using time-series, cross-state, and individual variation and find that it is countercyclical. We then set up a search and matching model with en...

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Bibliographic Details
Published in:American economic journal. Macroeconomics 2018-01, Vol.10 (1), p.190-215
Main Authors: Mukoyama, Toshihiko, Patterson, Christina, Şahin, Ayşegül
Format: Article
Language:English
Subjects:
Business cycles
Conjoint analysis
Economic theory
Mosques & temples
Prayer
Unemployment
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Summary:We create a novel measure of job search effort exploiting the American Time Use and Current Population Surveys. We examine the cyclicality of search effort using time-series, cross-state, and individual variation and find that it is countercyclical. We then set up a search and matching model with endogenous search effort and show that search effort does not amplify labor market fluctuations but rather dampens them. Lastly, we examine the role of search effort in driving recent unemployment dynamics and show that the unemployment rate would have been 0.5 to 1 percentage points higher in the 2008–2014 period had search effort not increased.
ISSN:1945-7707
1945-7715
DOI:10.1257/mac.20160202