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

  • Stephen B. DeLoach


    (Department of Economics, Elon University)

  • Mark Kurt


    (Department of Economics, Elon University)

Discouraged and marginally attached workers have received increased attention from policy makers over the past several years. Theoretically, periods of recessions and high unemployment should directly influence individualÕs decisions whether or not to search for employment, creating more discouraged workers. Since 2003, there have been a number of large macroeconomic shocks (e.g. housing bubble, credit crunch, mass layoffs, etc.) which should affect job search intensity. To date, the relative magnitude of these shocks on the search intensity of the unemployed (but currently undiscouraged workers) has not been established in the literature. Using daily time use dairies from the American Time Use Survey 2003-2009 allow us to proxy search intensity directly by aggregating time spent in minutes on several job search activities: time spent sending out resumes, contacting employers, interviewing, reading ads on the internet and so forth. Results from Tobit estimation indicate the existence of significant negative wealth effects on search intensity through changes in the stock market and housing values that help explain the apparent acyclicality of search intensity observed in the data.

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Paper provided by Elon University, Department of Economics in its series Working Papers with number 2011-01.

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Length: 26 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:elo:wpaper:2011-01
Contact details of provider: Postal: 2700 Campus Box Elon College, NC 27244-2010
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  1. Krueger, Alan B. & Mueller, Andreas I., 2008. "Job Search and Unemployment Insurance: New Evidence from Time Use Data," IZA Discussion Papers 3667, Institute for the Study of Labor (IZA).
  2. Marcus Hagedorn & Iourii Manovskii, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," 2005 Meeting Papers 460, Society for Economic Dynamics.
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  13. Gautier, Pieter A & Moraga-González, José-Luis & Wolthoff, Ronald, 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," CEPR Discussion Papers 6440, C.E.P.R. Discussion Papers.
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  17. Lentz, Rasmus, 2010. "Sorting by search intensity," Journal of Economic Theory, Elsevier, vol. 145(4), pages 1436-1452, July.
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  19. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
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