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Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit

Listed author(s):
  • John M. Nunley
  • Adam Pugh
  • Nicholas Romero
  • Richard Alan Seals, Jr.

We use data from a résumé audit to estimate the impact of unemployment and underemployment on the employment prospects facing recent college graduates. We find no statistical evidence of negative duration dependence associated with unemployment spells for recent college graduates. Alternatively, college graduates who are underemployed have callback rates that are 30 percent lower than that for applicants who are adequately employed. The adverse effects of underemployment are robust across cities with different labor-market conditions. Internship experience obtained while completing one's degree reduces the negative effects of underemployment substantially. We conclude that underemployment serves as a strong, negative signal to prospective employers.

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File URL: http://cla.auburn.edu/econwp/Archives/2015/2015-13.pdf
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Paper provided by Department of Economics, Auburn University in its series Auburn Economics Working Paper Series with number auwp2015-13.

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Date of creation: Sep 2015
Handle: RePEc:abn:wpaper:auwp2015-13
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Web page: http://cla.auburn.edu/economics/

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