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Job Search, Job Finding and the Role of Unemployment Insurance History

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  • Wongkot Similan Rujiwattanapong

Abstract

Standard search theory predicts that (1) job search intensity increases with the relative gain from searching, and (2) job search intensity increases the job finding probability. Firstly, this paper presents new empirical findings that are at odds with these predictions when workers are categorised by their unemployment insurance (UI) history. UI recipients and former recipients search harder than those who never take up UI, yet they exhibit lower job-finding probabilities. Subsequently, I incorporate unproductive and inefficient job search, consistent with these empirical findings, into an otherwise standard stochastic equilibrium search-and-matching model with endogenous search intensity. Three key results emerge from these job search imperfections: (1) aggregate search intensity becomes acyclical leading to underestimated matching efficiency; (2) the general equilibrium effects of UI extensions and the labour market fluctuations are dampened; and (3) unemployment and its duration become more persistent.

Suggested Citation

  • Wongkot Similan Rujiwattanapong, 2025. "Job Search, Job Finding and the Role of Unemployment Insurance History," PIER Discussion Papers 240, Puey Ungphakorn Institute for Economic Research.
    • Handle: RePEc:pui:dpaper:240
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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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