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Job Search, Stigma Effect, and Escape Rate from Unemployment

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  • Vishwanath, Tara

Abstract

This article formulates job search models, incorporating certain types of the "stigma" effect of unemployment. It is assumed that the probability of getting a job offer, given the unemployment individual contacts the firm, is influenced by the duration of unemployment and is justified in a signaling context. The optimal search is analyzed for one sector, as well as across several independent labor-market segments. It is shown that there are reasonably general conditions on the search environments, for which both the individual reservation wage and escape rate are negative-duration dependent, a fact observed in empirical studies. Copyright 1989 by University of Chicago Press.

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  • Vishwanath, Tara, 1989. "Job Search, Stigma Effect, and Escape Rate from Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 487-502, October.
  • Handle: RePEc:ucp:jlabec:v:7:y:1989:i:4:p:487-502
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