What Drives Job Search? Evidence from Google Search Data

Abstract

The large-scale unemployment caused by the Great Recession has necessitated unprecedented increases in the duration of unemployment insurance (UI). While it is clear that the weekly payments are beneficial to recipients, workers receiving benefits have less incentive to engage in job search and accept job offers. We construct a job search activity index based on Google data which provides the first daily, state-specific measure of job search activity. We demonstrate the validity of our measure by benchmarking it against the American Time Use Survey and the comScore Web-User Panel, and also by showing that it varies with hypothesized drivers of search activity. We test for search activity responses to policy shifts and changes in the distribution of unemployment benefit duration. We find that search activity is greater when a claimant’s UI benefits near exhaustion. Furthermore, search activity has a negative but short-lived response to the passage of bills that increase unemployment benefits duration. Using daily data, we estimate that an increase by 1 percentage point of a state’s population receiving additional unemployment benefits (eg. from .5% to 1.5% of the population) results in a decrease in aggregate search activity of 1.7% in the week following the policy change.