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Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed

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  • Stephen DeLoach
  • Mark Kurt

Abstract

Discouraged and marginally attached workers have received increasing attention from policy makers over the past several years. Through slackness in the labor market, periods of high unemployment should reduce the likelihood of receiving a job offer and thus create more discouraged workers. However, the existing literature generally fails to find evidence of such pro-cyclicality in search intensity. Surprisingly, search appears to be acyclical. We hypothesize the observed acyclicality may be the result of coarse measurement of search intensity in previous studies and the failure to account for changes in individuals’ wealth across the business cycle. In this paper we use daily time use dairies from the American Time Use Survey 2003–2011 to examine the cyclicality of search intensity to explain this apparent contradiction between theory and data. Results indicate that workers do reduce their search in response to deteriorating labor market conditions, but these effects appear to be offset by the positive effects on search that are correlated with declines in household wealth. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Stephen DeLoach & Mark Kurt, 2013. "Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed," Journal of Labor Research, Springer, vol. 34(4), pages 433-454, December.
    • Handle: RePEc:spr:jlabre:v:34:y:2013:i:4:p:433-454
    DOI: 10.1007/s12122-013-9166-0
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    More about this item

    Keywords

    Search intensity; Housing prices; Discouraged workers; Business cycles; JEL codes J2; J6; J1; E24; E32;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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