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Reality of on-the-job search

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Author Info

  • Shigeru Fujita

Abstract

This paper provides a set of simple, yet overlooked, facts regarding on-the-job search and job-to-job transitions using the UK Labour Force Survey (LFS). The LFS is unique in that it asks employed workers whether they search on the job and, if so, why. The author finds that workers search on the job for very different reasons, which lead to different outcomes in both mobility and wage growth. A nontrivial fraction of workers engage in on-the-job search due to a fear of losing their job. This group mimics many known features of unemployed workers, such as wage losses upon finding a job. Workers also search on the job because they are unsatisfied. This group is roughly equally split into those who are unsatisfied with pay and those who are unsatisfied with other aspects of their job. Distinguishing these two groups allows the author to highlight the importance of the nonpecuniary value of a job. He further shows that the evidence that firms make a counteroffer in response to a worker's outside offer is scarce and that wage outcomes at the time of job-to-job transitions are closely linked to the worker's outside option. The evidence in this paper contributes not only to deepening our understanding of labor reallocation, but it also suggests the fruitful directions of future research in the labor search literature.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 10-34.

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Date of creation: 2010
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Handle: RePEc:fip:fedpwp:10-34

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Related research

Keywords: Job satisfaction ; Job security ; Labor market ; Employment;

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Cited by:
  1. Gomes, Pedro, 2012. "Labour market flows: Facts from the United Kingdom," Labour Economics, Elsevier, vol. 19(2), pages 165-175.
  2. Jung, Philip & Kuhn, Moritz, 2012. "Earnings losses and labor mobility over the life-cycle," MPRA Paper 40287, University Library of Munich, Germany.
  3. Daniel Martin & Olivier Pierrard, 2011. "On-the-job Search and Cyclical Unemployment: Crowding Out vs. Vacancy Effects," BCL working papers 64, Central Bank of Luxembourg.

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