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Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit

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  • John M. Nunley
  • Adam Pugh
  • Nicholas Romero
  • Richard Alan Seals, Jr.

Abstract

We use data from a résumé audit to estimate the impact of unemployment and underemployment on the employment prospects facing recent college graduates. We find no statistical evidence of negative duration dependence associated with unemployment spells for recent college graduates. Alternatively, college graduates who are underemployed have callback rates that are 30 percent lower than that for applicants who are adequately employed. The adverse effects of underemployment are robust across cities with different labor-market conditions. Internship experience obtained while completing one's degree reduces the negative effects of underemployment substantially. We conclude that underemployment serves as a strong, negative signal to prospective employers.

Suggested Citation

  • John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2015. "Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit," Auburn Economics Working Paper Series auwp2015-13, Department of Economics, Auburn University.
    • Handle: RePEc:abn:wpaper:auwp2015-13
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    Cited by:

    1. Farber, Henry S & Silverman, Dan & Wachter, Till von, 2015. "Factors Determining Callbacks to Job Applications by the Unemployed: An Audit Study," IZA Discussion Papers 9465, Institute of Labor Economics (IZA).
    2. Nunley, John M. & Pugh, Adam & Romero, Nicholas & Seals, R. Alan, 2016. "College major, internship experience, and employment opportunities: Estimates from a résumé audit," Labour Economics, Elsevier, vol. 38(C), pages 37-46.
    3. Henry S. Farber, 2016. "Employment, Hours and Earnings Consequences of Job Loss: U.S. Evidence from the Displaced Workers Survey," Working Papers 589a, Princeton University, Department of Economics, Industrial Relations Section..
    4. Nüß, Patrick, 2017. "Duration Dependence as an Unemployment Stigma: Evidence from a Field Experiment in Germany," GLO Discussion Paper Series 88, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Unemployment; Underemployment; Duration Dependence; Labor Demand; Employment; Internships; Field Experiments; Correspondence Studies; Résumé Audit;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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