Job Search Behavior among the Employed and Non-Employed

Using a unique new survey, we study the relationship between search effort and search outcomes for employed and non-employed job seekers. Our data have extensive information on individuals’ current and previous employment situations, search behavior, job offers, accepted offers, and reservation wages. We find that the unemployed fare much worse than the employed in their job search prospects along several dimensions, despite higher job search effort. The unemployed receive fewer offers per job application, and conditional on an offer, they are offered lower pay, fewer benefits, and fewer hours. Despite this, they are more likely to accept these lower-quality offers but are also much more likely to again engage in job search on their new job. In contrast, employed job seekers receive a higher fraction of both solicited and unsolicited job offers. In fact, the employed that are not searching tend to generate more plentiful and higher-quality job offers than the unemployed. We apply our results to a model of on-the-job search with search frictions and endogenous search effort. A simple application of the estimates to the model suggest that the employed are substantially more efficient in their job search relative to the unemployed.