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Evidence on Job Search Models from a Survey of Unemployed Workers in Germany

Author

Listed:
  • Stefano DellaVigna
  • Jörg Heining
  • Johannes F. Schmieder
  • Simon Trenkle

Abstract

The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To better understand the underlying mechanisms, we conducted a large text-message-based survey of unemployed workers in Germany. We surveyed 6,800 UI recipients twice a week for 4 months about their job search effort. The panel structure allows us to observe how search effort evolves within individual over the unemployment spell. We provide three key facts: 1) search effort is flat early on in the UI spell, 2) search effort exhibits an increase up to UI exhaustion and a decrease thereafter, 3) UI recipients do not appear to time job start dates to coincide with the UI exhaustion point. A model of reference-dependent job search can explain these facts well, while a standard search model with unobserved heterogeneity struggles to explain the second fact. The third fact also leaves little room for a model of storable offers to explain the spike.

Suggested Citation

  • Stefano DellaVigna & Jörg Heining & Johannes F. Schmieder & Simon Trenkle, 2020. "Evidence on Job Search Models from a Survey of Unemployed Workers in Germany," NBER Working Papers 27037, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:27037
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    More about this item

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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