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Household Search or Individual Search: Does It Matter?

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  • Luca Flabbi
  • James Mabli

Abstract

Most labor market search models ignore the fact that decisions are often made at the household level. We fill this gap by developing and estimating a household search model with on-the-job search and labor supply. We find that ignoring the household as a decision-making unit has relevant empirical consequences. In estimation, the individual search model implies gender wage offer differentials almost twice as large as the household search model. In the application, the individual search model implies female lifetime inequality 30% lower than the household search model. Labor market policy effects on lifetime inequality are also sensitive to the specification.

Suggested Citation

  • Luca Flabbi & James Mabli, 2018. "Household Search or Individual Search: Does It Matter?," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 1-46.
  • Handle: RePEc:ucp:jlabec:doi:10.1086/693864
    DOI: 10.1086/693864
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    Cited by:

    1. Bobba, Matteo & Flabbi, Luca & Levy, Santiago & Tejada, Mauricio, 2021. "Labor market search, informality, and on-the-job human capital accumulation," Journal of Econometrics, Elsevier, vol. 223(2), pages 433-453.
    2. J. Ignacio García‐Pérez & Sílvio Rendon, 2020. "Family job search and wealth: The added worker effect revisited," Quantitative Economics, Econometric Society, vol. 11(4), pages 1431-1459, November.
    3. Bobba, Matteo & Flabbi, Luca & Levy, Santiago, 2017. "Labor Market Search, Informality and Schooling Investments," TSE Working Papers 17-867, Toulouse School of Economics (TSE), revised Jun 2021.
    4. Conti, Gabriella & Ginja, Rita & Narita, Renata, 2018. "The Value of Health Insurance: A Household Job Search Approach," IZA Discussion Papers 11706, Institute of Labor Economics (IZA).
    5. Haomin Wang, 2019. "Intra-Household Risk Sharing and Job Search over the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 165-182, October.
    6. Sansone, Dario, 2019. "Pink work: Same-sex marriage, employment and discrimination," Journal of Public Economics, Elsevier, vol. 180(C).
    7. Valeria Rueda & Guillaume Wilemme, 2021. "Career Paths with a Two-Body Problem: Occupational Specialization and Geographic Mobility," Upjohn Working Papers and Journal Articles 21-346, W.E. Upjohn Institute for Employment Research.
    8. Haomin Wang, 2019. "Intra-Household Risk Sharing and Job Search over the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 165-182, October.
    9. Hanming Fang & Andrew J. Shephard, 2019. "Household Labor Search, Spousal Insurance, and Health Care Reform," NBER Working Papers 26350, National Bureau of Economic Research, Inc.
    10. Guner, Nezih & Kulikova, Yuliya & Valladares-Esteban, Arnau, 2020. "Does the Added Worker Effect Matter?," IZA Discussion Papers 12923, Institute of Labor Economics (IZA).
    11. Bustelo, Monserrat & Flabbi, Luca & Piras, Claudia & Tejada, Mauricio, 2019. "Female Labor Force Participation, Labor Market Dynamic and Growth in LAC," IDB Publications (Working Papers) 9420, Inter-American Development Bank.
    12. Salazar-Saenz,Mauricio & Robayo,Monica, 2020. "A Structural Model of the Labor Market to Understand Gender Gaps among Marginalized Roma Communities," Policy Research Working Paper Series 9398, The World Bank.
    13. Christine Braun & Charlie Nusbaum & Peter Rupert, . "Labor Market Dynamics and the Migration Behavior of Married Couples," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.

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