Modern job search technologies enable job seekers to monitor the arrival of newly posted vacancies. This paper conceptualizes search as a monitoring decision and shows that monitoring technologies ...give rise to a novel source of strategic complementarities in search and can thus lead to potentially destabilizing multiplicity of equilibria. The model provides a theory of belief-driven fluctuations in labor supply that can permanently shift the path of the economy, and offers an explanation for persistently weak wage growth despite low unemployment during the recovery from the Great Recession.
•Theoretical model of search as monitoring decision.•First-mover advantage leads to strategic complementarities and multiple equilibria.•Model gives rise to belief-driven labor supply fluctuations.•Model can help to account for overshooting of unemployment after Great Recession despite tepid wage growth.
This paper tests for habit-formation in leisure-related internet use (LIU) using time-diary data from a panel of unemployed workers. Drawing on insights from the consumption-habit literature, I use a ...model of intertemporal time allocation to derive a test for habit-formation in leisure activities. The data reveal strong evidence of habit-formation in LIU among the Generation-X age cohort. With the exception of reading, I find no evidence of habit-formation in offline leisure.
•Model of leisure-time allocation in the presence of habit-formation.•New evidence of habit-formation in online leisure time.•No evidence of habit-formation in offline leisure activities, with the exception of reading.
•Evidence that learning helps explain declining search effort during Great Recession.•Tractable model of search in which beliefs have nonmonotinic effect on search effort.•Structural estimation ...indicating that learning provides strong account of search data.•Evidence from search decisions that job seekers overestimate job-finding prospects.
Krueger and Mueller (2011) document that search effort declined with unemployment duration during the Great Recession. I show that variation in past effort explains this decline. Furthermore, job offers increase subsequent effort. These facts are inconsistent with standard models of search. I introduce a model of sequential search in which workers are uncertain about the offer arrival process and learn through search. Evolving beliefs influence search through two competing channels: the opportunity cost of leisure and the option value of unemployment. Estimation of the model indicates that learning provides a strong account of job search dynamics during the Great Recession.
In 1979, the Levitan Commission identified discouragement as one of three main sources of economic hardship, and recommended the development of an index to measure the extent of the problem. Over ...40 years later, no such index exists. This letter proposes an index of discouragement-induced hardship and documents its evolution over time and across demographic groups.
Wage offers and on‐the‐job search Potter, Tristan; Bernhardt, Dan
The Canadian journal of economics,
February / Février 2022, Letnik:
55, Številka:
1
Journal Article
Recenzirano
Odprti dostop
We study the wage‐setting problem of an employer with private information about demand for its product when workers can engage in costly on‐the‐job search. Employers understand that low wage offers ...may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate‐revenue employers on a common wage that just deters search, (ii) discontinuously lower revealing offers by low‐revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage and (iii) high revealing offers by high‐revenue employers seeking to deter aggressive raiders.
Résumé
Offres salariales et recherche d'emploi sur le lieu de travail. Dans cet article, nous étudions le problème de fixation des salaires lorsqu'un employeur dispose d'informations confidentielles concernant la demande pour ses produits et que les salariés peuvent se lancer dans une recherche d'emploi coûteuse sur leur lieu de travail. Les employeurs ont conscience que les offres salariales basses peuvent être annonciatrices de mauvaises nouvelles incitant les travailleurs à chercher un autre emploi. En matière de stratégie salariale, l'équilibre séquentiel parfait et unique consiste 1) pour les employeurs à revenu intermédiaire : à se regrouper autour d'un salaire commun permettant de dissuader les salariés de chercher un autre emploi; 2) pour les employeurs à faible revenu ne pouvant dissuader leurs employés de chercher un autre emploi : à diminuer les propositions salariales de façon discontinue de sorte que la fixation d'un salaire commun élevé requis cesse d'être justifiable; et 3) pour les employeurs à revenu élevés : à proposer des offres salariales avantageuses afin de dissuader le débauchage agressif de leurs salariés.
We identify the main shock driving fluctuations in long-horizon productivity expectations, consistent with theories of TFP news. The identified shock induces strong comovement patterns in output, ...consumption, investment, employment, and stock prices even though TFP does not change significantly for more than 2 years. A labor search model in which wages are determined by a cash-flow sharing rule, rather than the present value of match surplus, matches the observed responses to the news shock. The model also matches the empirical patterns of vacancies, labor force participation, hours, and job-finding rates. The proposed wage rule is consistent with empirical responses of wages to both anticipated and unanticipated productivity changes.
This paper tests for habit-formation in leisure-related internet use (LIU) using time-diary data from a panel of unemployed workers. Drawing on insights from the consumption-habit literature, I use a ...model of intertemporal time allocation to derive a test for habit-formation in leisure activities. The data reveal strong evidence of habit-formation in LIU among the Generation-X age cohort. With the exception of reading, I find no evidence of habit-formation in offline leisure.
Using a newly created microeconomic archive of US imports at the tariff line level for 1930–1933, we construct industry-level tariff wedges incorporating the input–output structure of US economy and ...the heterogeneous role of imports across sectors of the economy. We use these wedges to show that the average tariff rate of 46% in 1933 substantially understated the true impact of the Smoot–Hawley (SH) tariff structure, which we estimate to be equivalent to a uniform tariff rate of 70%. We use these wedges to calculate the impact of the Smoot–Hawley tariffs on total factor productivity and welfare. In our benchmark parameterization, we find that tariff protection reduced TFP by 1.2% relative to free trade prior to the Smoot–Hawley legislation. TFP fell by an additional 0.5% between 1930 and 1933 due to Smoot–Hawley. We also conduct counterfactual policy exercises and examine the sensitivity of our results to changes in the elasticity of substitution and the import share. A doubling of the substitution elasticities yields a TFP decline of almost 5% relative to free trade, with an additional reduction due to SH of 0.4%.
This dissertation studies unemployment—both its micro-level contours and its macro-level fluctuations—from a search-theoretic perspective. Guided by the structure of search theory, each constituent ...chapter employs a different set of empirical tools to confront a fundamental aspect of joblessness.
We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labor turnover. The model is consistent with empirical studies showing that NCAs reduce turnover, average wages, ...and wage dispersion for low-wage workers. But the model also predicts that NCAs, by reducing turnover, raise recruitment and employment. We show that optimal NCA policy: (i) is characterized by a Hosios like condition that balances the benefits of higher employment against the costs of inefficient congestion and poaching; (ii) depends critically on the minimum wage, such that enforcing NCAs can be efficient with a sufficiently high minimum wage; and (iii) alone cannot always achieve efficiency, also true of a minimum wage-yet with both instruments efficiency is always attainable. To guide policy makers, we derive a sufficient statistic in the form of an easily computed employment threshold above which NCAs are necessarily inefficiently restrictive, and show that employment levels in current low-wage U.S. labor markets are typically above this threshold. Finally, we calibrate the model to show that Oregon's 2008 ban of NCAs for low-wage workers increased welfare, albeit modestly (by roughly 0.1%), and that if policy makers had also raised the minimum wage to its optimal level (a 30% increase), welfare would have increased more substantially-by over 1%.
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