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Unemployment Benefit Levels and Search Activity

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Author Info
Schmitt, John
Wadsworth, Jonathan

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Abstract

This paper endogenises the job offer arrival rate in a standard search model in order to test the hypothesis that unemployment-related benefits may affect the job search behavior of unemployed workers independently of any reservation wage effect. Using a pooled cross-section of 1484 unemployed British men from the 1979 to 1982 General Household Surveys, we find that the level of benefit has no significant effect on unemployed search behavior. Any disincentive effect of an increase in benefits on the return to job search is offset by a positive stimulus to search from increased income. Factors which do have an important impact on search activity include: age, unemployment duration, occupation, and education level. Further, local labor market conditions affect only the job search behavior of the short-term unemployed. Copyright 1993 by Blackwell Publishing Ltd

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Publisher Info
Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

Volume (Year): 55 (1993)
Issue (Month): 1 (February)
Pages: 1-24
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Handle: RePEc:bla:obuest:v:55:y:1993:i:1:p:1-24

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  4. René Böheim & Mark P Taylor, 2002. "Job search methods, intensity and success in Britain in the 1990s," Economics working papers 2002-06, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
  5. Simon C. Parker & Mirjam C. van Praag, 2006. "The Entrepreneur's Mode of Entry: Business Takeover or New Venture start?," Tinbergen Institute Discussion Papers 06-089/3, Tinbergen Institute. [Downloadable!]
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  6. Alexandra Heath, 1999. "Job-search Methods, Neighbourhood Effects and the Youth Labour Market," RBA Research Discussion Papers rdp1999-07, Reserve Bank of Australia. [Downloadable!]
  7. William Collier, 2005. "Unemployment duration and individual heterogeneity: a regional study," Applied Economics, Taylor and Francis Journals, vol. 37(2), pages 133-153, February. [Downloadable!] (restricted)
  8. Van der Linden, Bruno & Dor, Eric, 1998. "The net effect of unemployment benefits, sanctions and training on aggregate unemployment outflows," Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Discussion Paper 2000020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2000. [Downloadable!]
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  13. Maia Guell, 2000. "The effects of fixed-term contracts on the duration distribution of unemployment: the Spanish case," Working Papers 822, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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