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Impact of financial pressure on unemployed job search, job find success and job quality

Author

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  • Gerards, Ruud

    (ROA / Training and employment)

  • Welters, Ricardo

    (james cook university college of business, law and governance)

Abstract

Research shows that financial pressure – implied as a consequence of benefit sanctions or exhaustion – prompts the unemployed to intensify their job search. However, there is less agreement about whether that intensified job search produces better quality job outcomes. Building on Self-Determination Theory we posit that financial pressure is a controlled motivator to search for work. Controlled motivators are conducive to goal pursuit (job search activity), yet unfavorable to goal achievement (job search success and job quality). Using the HILDA longitudinal data for Australia, we are able to include direct measures of both financial pressure (cash flow problems and hardship), objective job quality (hourly pay and hours worked) as well as subjective job quality (satisfaction with pay and hours). We find that financial pressure intensifies job search without improving the job find rate and job quality outcomes if a job is secured. Interestingly, if a job is secured the unemployed who searched under financial pressure perceive the job to be of lower quality (in terms of satisfaction with pay and hours worked) even though objectively (in terms of actual pay and hours worked) it is similar to the jobs found by the unemployed who searched without financial pressure. Policy implications are discussed.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gerards, Ruud & Welters, Ricardo, 2016. "Impact of financial pressure on unemployed job search, job find success and job quality," Research Memorandum 022, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2016022
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    References listed on IDEAS

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    Keywords

    economics; labour economics;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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