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Asset Accumulation and Short Term Employment

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  • Martin Browning

    (University of Copenhagen)

  • Thomas F. Crossley

    (McMaster University)

  • Eric F. Smith

    (University of Essex)

Abstract

If access to credit is limited (especially when young or unemployed) but "bad" jobs are easy to come by, then job seekers might use short term employment in undesirable jobs as a way to finance consumption during subsequent unemployed search for a "good" job. In this paper we explore this idea by building a theoretical model of job search by risk averse, debt constrained agents. In this model we characterize analytically conditions under which voluntary planned separations occur as agents cycle between accumulating assets in short term employment and unemployed search for more desirable employment. (Copyright: Elsevier)

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Bibliographic Info

Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 10 (2007)
Issue (Month): 3 (July)
Pages: 400-423

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Handle: RePEc:red:issued:05-38

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Related research

Keywords: Unemployment; Search; Consumption; Assets;

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References

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  1. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(2), pages 439-79, May.
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  17. Rasmus Lentz, 2009. "Optimal Unemployment Insurance in an Estimated Job Search Model with Savings," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 37-57, January.
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Citations

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Cited by:
  1. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
  2. Bulent Guler & Fatih Guvenen & Giovanni L. Violante, 2009. "Joint-Search Theory: New Opportunities and New Frictions," NBER Working Papers 15011, National Bureau of Economic Research, Inc.
  3. Jeremy Lise, 2011. "On-the-Job Search and Precautionary Savings: Theory and Empirics of Earnings and Wealth Inequality," IFS Working Papers, Institute for Fiscal Studies W11/16, Institute for Fiscal Studies.
  4. Cockx, Bart & Picchio, Matteo, 2009. "Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs?," IZA Discussion Papers 4007, Institute for the Study of Labor (IZA).
  5. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, Elsevier, vol. 65(C), pages 108-125.
  6. Wolff, Joachim & Nivorozhkin, Anton, 2008. "Start me up: The effectiveness of a self-employment programme for needy unemployed people in Germany," IAB Discussion Paper, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] 200820, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Tricia Gladden & Michelle Alexopoulos, 2004. "The Effects of Wealth, and Unemployment Benefits on Search Behavior and Labor Market Transitions," Econometric Society 2004 North American Summer Meetings, Econometric Society 517, Econometric Society.
  8. Luz Adriana Flórez, 2014. "Optimal Policy with Informal Sector and Endogenous Savings," Borradores de Economia 833, Banco de la Republica de Colombia.
  9. Luz Adriana Flórez, 2014. "Optimal Policy with Informal Sector and Endogenous Savings," BORRADORES DE ECONOMIA, BANCO DE LA REPÚBLICA 011960, BANCO DE LA REPÚBLICA.

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