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Job Search and Impatience

Author

Listed:
  • Stefano DellaVigna

    (University of California, Berkeley, and National Bureau of Economic Research)

  • M. Daniele Paserman

    (Hebrew University, CEPR, and IZA)

Abstract

Workers who are more impatient search less intensively and set lower reservation wages. The effect of impatience on exit rates from unemployment is therefore unclear. If agents have exponential time preferences, the reservation wage effect dominates for sufficiently patient individuals, so increases in impatience lead to higher exit rates. The opposite is true for agents with hyperbolic time preferences. Using two large longitudinal data sets, we find that impatience measures are negatively correlated with search effort and the unemployment exit rate and are orthogonal to reservation wages. Impatience substantially affects outcomes in the direction predicted by the hyperbolic model.

Suggested Citation

  • Stefano DellaVigna & M. Daniele Paserman, 2005. "Job Search and Impatience," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 527-588, July.
  • Handle: RePEc:ucp:jlabec:v:23:y:2005:i:3:p:527-588
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    More about this item

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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