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A structural analysis of job search methods and subsequent wages

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  • Koning, Pierre

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Berg, Gerard J. van den
  • Ridder, Geert

Abstract

In most studies on individual labor market transitions, the search process leading to job offers is a black box. In this paper we specify and estimate a search model that distinguishes between formal (applications) and informal (referrals) search methods. Job offers can be obtained by either method, and the corresponding wage offer distributions are allowed to differ. The model allows for search during unemployment as well as search on the job. We conclude that although the method by which jobs are found varies considerably with education and occupation, the use of a particular search method does not result in a higher wage. Moreover, individuals who have an advantage in informal search do not find a job more rapidly, which casts doubt on the hypothesis that the search method is freely chosen by the searcher by comparing costs and returns.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0036.

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Date of creation: 1997
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Handle: RePEc:dgr:vuarem:1997-36

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Web page: http://www.feweb.vu.nl

Related research

Keywords: job search; search methods; wages; individual labor market transitions;

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References

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  1. Albrecht, James W. & Holmlund, Bertil & Lang, Harald, 1986. "Comparative Statics in Dynamic Programming Models with an Application to Job Search," Working Paper Series 172, Research Institute of Industrial Economics, revised Aug 1991.
  2. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  3. Dale T. Mortensen & Tara Vishwanath, 1991. "Information Sources and Equilibrium Wage Outcomes," Discussion Papers 948, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Ours, J.C. van & Lindeboom, M. & Renes, G., 1994. "Matching Employers and Workers: an Empirical Analysis on the Effectiveness of Search," Open Access publications from Tilburg University urn:nbn:nl:ui:12-142172, Tilburg University.
  5. C, Bontemps & Jean-Marc Robin & G, Van Den Berg, 1997. "Equilibrium Search with Productivity Dispersion : Theory and Estimation," Working Papers 97-09, Centre de Recherche en Economie et Statistique.
  6. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
  7. repec:fth:inseep:9709 is not listed on IDEAS
  8. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
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Citations

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Cited by:
  1. repec:iza:izadps:102 is not listed on IDEAS
  2. Klaauw, B. van der & Ours, J.C. van, 1999. "Labor Supply and Matching Rates for Welfare Recipients: An Analysis Using Neighborhood Characterisitics," Discussion Paper 1999-105, Tilburg University, Center for Economic Research.
  3. Bloemen, Hans G., 2003. "Job search, search intensity and labour market transitions : an empirical analysis," Serie Research Memoranda 0026, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  4. Arceo-Gómez, Eva Olimpia, 2012. "Job Search, Networks, and Labor Market Performance of Immigrants," MPRA Paper 44533, University Library of Munich, Germany.
  5. Vera A. Adamchik & Josef C. Brada & Arthur E. King, 2009. "Are Transition Economy Workers Underpaid?," Working Papers 278, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  6. Marco Caliendo & Ricarda Schmidl & Arne Uhlendorff, 2011. "Social networks, job search methods and reservation wages: evidence for Germany," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 796-824, November.
  7. Krug, Gerhard & Rebien, Martina, 2011. "Job search via social networks : An analysis of monetary and non-monetary returns for low-skilled unemployed," IAB Discussion Paper 201123, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2008. "Does the Public Employment Service Affect Search Effort and Outcomes?," CEPR Discussion Papers 7095, C.E.P.R. Discussion Papers.
  9. Santos, Miguel, 2010. "From Training to Labour Market. Holocletic Model," MPRA Paper 26617, University Library of Munich, Germany.
  10. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public versus Private Search Methods," IZA Discussion Papers 1825, Institute for the Study of Labor (IZA).
  11. Gerard J. van den Berg, 1998. "Empirical Inference with Equilibrium Search Models of the Labor Market," Tinbergen Institute Discussion Papers 98-089/3, Tinbergen Institute.

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