Job Finding Rate Research Articles

Job Destruction and Job Finding Rates by Age in Danmark

I use register data from Statistics Danmark to compute job destruction and job finding rates by age in Danmark. The data shows that the life cycle has far more variation in finding and destruction rates than the business cycle. In addition, rates that account for job to job transitions are much higher and more stable over the cycle than rates of movement in and out of employment that exclude them. Finally, the destruction and finding rates that should be used in the new MAKRO model of the Danish economy are the ones that include job to job transitions.

Temporary Unemployment and Labor Market Dynamics during the COVID-19 Recession

This paper develops a search-and-matching model that incorporates temporary unemployment and applies the model to study the labor market dynamics of the COVID-19 recession in the US. We calibrate the model using panel data from the Current Population Survey for 2001-2019, and we find that the model-based job finding rates match observed job finding rates during the entire sample period and out-of-sample up through July 2020. We also find that the Beveridge curve is well-behaved and displays little change in market tightness in 2020 once we use the calibrated model to adjust for changes in the composition of the unemployed. We then use the model to project the path of unemployment over the next 18 months. Under a range of assumptions about job losses and labor demand, our model predicts a more rapid recovery compared to a model that does not distinguish between temporary and permanent unemployment and compared to professional and academic forecasts. We find that in order to rationalize the professional forecasts of the unemployment rate, some combination of the vacancy rate, job separation rate, and the recall rate of workers on temporary layoff must deteriorate substantially from current levels in the next several months.

The impact of monitoring and sanctioning on unemployment exit and job-finding rates

The impact of monitoring and sanctioning on unemployment exit and job-finding rates

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

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 6,349 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 individuals 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 standard search model with unobserved heterogeneity struggles to explain the second fact, and a model of storable offers is not consistent with the third fact. The patterns are well captured by a model of reference-dependent job search or by a model with duration dependence in search cost. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Wealth, Portfolios, and Unemployment Duration

We use administrative data on individual balance sheets in Denmark to document how an individual's financial position affects job search behavior. We look at the effect of wealth at the entry into unemployment on the exit rate from unemployment as well as the effect on the subsequent match quality. The detailed data allows us not only to distinguish between liquid and illiquid parts, but also to decompose each of them into assets and liabilities. The decomposition of wealth into these four components is key to understanding how wealth affects job finding rates. In particular, we show that liquid assets reduce the probability of becoming re-employed, but we do not see an effect of liquid liabilities or the illiquid wealth components, while interest payments speed up re-employment. The results on subsequent match quality in form of job duration and wages are mixed.

The Effect of Unemployment Insurance Benefits on (Self-) Employment: Two Sides of the Same Coin?

Although a relevant share of firms is created out of unemployment and current active labor market policies in Europe often subsidize unemployed individuals to start their own businesses, little is known about the role of unemployment insurance (UI) generosity for self-employment. By using Spanish administrative data including so far inaccessible information on self-employment, we exploit a reform-driven exogenous cut in UI benefits to identify its causal effect on general employment and decompose it into the effects on self-employment and re-employment. Exploiting a discontinuity in the UI benefit schedule which changed as a result of the 2012 Spanish labor market reform, we estimate the causal reform effects on the extensive margin of (self-)employment and on unemployment duration. We find heterogeneous effects on the extensive margin: while the job-finding rate increases, the startup rate decreases. Over different time horizons, the negative effect on self- employment (35-50%) outweighs the positive effect on employment (5-33%). Therefore, omitting self-employment as a counterfactual outcome might lead to overestimate general employment effects. Our UI benefit duration elasticity estimates indicate that reduced UI benefits extend unemployment duration for individuals transitioning into self-employment but shorten unemployment for individuals finding re-employment. These results might be relevant for the (optimal) design of UI systems.

Improving Job Search Skills: A Field Experiment on Online Employment Assistance

Finding a job requires effective search skills to engage successfully with employers with vacancies. In a field experiment, we test a website that supplements such search skills by providing editable resume and cover letter templates as well as tips on how to look and apply for jobs. Exposure to the website was randomized among about 2,700 job seekers in Australia. The intervention increased job-finding rates, particularly among job seekers aged 35-50 (up to 8 percentage points), with larger effects for women within this age group (up to 10 percentage points). The quality of job matches improved too.

The Adverse Effect of the COVID-19 Labor Market Shock on Immigrant Employment

Employment rates in the United States fell dramatically between February 2020 and April 2020 as the initial repercussions of the COVID-19 pandemic reverberated through the labor market. This paper uses data from the CPS Basic Monthly Files to document that the employment decline was particularly severe for immigrants. Historically, immigrant men were more likely to be employed than native men. The COVID-related labor market disruptions eliminated the immigrant employment advantage.By April 2020, immigrant men had lower employment rates than native men. The reversal occurred both because the rate of job loss for at-work immigrant men rose relative to that of natives, and because the rate at which out-of-work immigrants could find jobs fell relative to the native job-finding rate. A small part of the relative increase in the immigrant rate of job loss arises because immigrants were less likely to work in jobs that could be performed remotely and suffered disparate employment consequences as the lockdown permitted workers with more "remotable" skills to continue their work from home.

Job Finding Rate and Female Labor Supply- A Heterogeneity Perspective

Background: In contemporary labor economics, the concept of job finding rate is central as it defines the job search and measures the employment potential of the labor market. Considering this fact, economists primarily count on measuring the flows of labor between the labor market states. The study is an endeavour to design a conceptual framework to determine female labor supply considering these labor market flows and job finding rate in Pakistan.
 Methodology: The study evaluates various search models and provides a comprehensive review of literature taking into consideration job finding rate and female labor supply. Electronic databases including Google Scholar & Medline were used. Articles, books, and conference proceedings were cited using keywords like Job Finding rate, female labor and labor market, etc. 
 Result: The study has introduced the perspective of heterogeneity to incorporate the composition effect and dispersion effect of the labor market. The framework of the study provides a hint for policy makers to consider the relevant flows for improvement in female employment in Pakistan.
 Conclusion: The main conclusion stresses on including the inactive group to link up the job finding rate with female labor supply. Not doing so would bias the imputed importance of factors shaping aggregate participation and unemployment rates.

Why Cash Transfer Programs Can Both Stimulate and Slow Down Job Finding

Abstract This article analyzes the behavioral effects of cash transfer programs when jobless people need to have access to a minimum consumption level. Our model reconciles recent evidence about negligible or favorable effects of cash transfers on job-finding rates and the more standard view of negative effects. When unemployment compensation, if any, is low enough, we argue that cash transfer programs can raise the hiring probability. Our framework is flexible enough to generate the standard conclusion as well. Looking specifically at unemployment compensation, its optimal level is generally higher than when a lower bound on consumption is ignored.

How the ins and outs shape differently the U.S. unemployment over time and across frequencies

Although the U.S. case has been studied extensively, the importance of job finding and separation rates to unemployment variability remains unsettled. The aim of this paper is to contribute to this debate by adopting a novel lens, wavelet analysis. We resort to wavelet analysis to unveil time- and frequency-varying features regarding the contribution of the job finding and job separation rates for the U.S. unemployment rate dynamics. Drawing on this approach, we are able to reconcile some apparently contradictory findings reported in previous literature. We find that the job finding rate is more influential for the overall unemployment behaviour but the job separation rate also plays a critical role, especially during recessions. In particular, the job separation rate accounts for, on average, 53 percent of the unemployment variability at short-run fluctuations during recessions, in sharp contrast with an overall contribution of 21 percent over time and across frequencies.

Financial Support and University Performance in Korean Universities: A Panel Data Approach

This study analyzes the relationship between governmental financial support and university performance to determine whether the former enhances the latter or if universities enhance performance to attain government financial support. The types of financial support to universities considered in this study include those from central and local governments. University performance is defined in terms of the job-finding rates of students, number of publications in South Korean academic journals per full-time faculty member, and number of publications in SCI journals per full-time faculty member. This study uses financial support data of 148 universities from 2009 to 2017. To investigate the relationship between university financial support and performance, we use panel Granger causality testing and panel vector auto-regressive modeling. The results show that both central and local governmental financial support have an endogenous association with students’ job-finding rates. However, local governmental financial support and research performance show a reverse causality association.

Nonparametric Instrumental Variable Methods for Dynamic Treatment Evaluation

We develop an instrumental variable approach for identification of dynamic treatment effects on survival outcomes in the presence of dynamic selection, noncompliance, and right-censoring. The approach is nonparametric and does not require independence of observed and unobserved characteristics or separability assumptions. We propose estimation procedures and derive asymptotic properties. We apply our approach to evaluate a policy reform in which the pathway of unemployment benefits as a function of the unemployment duration is modified. Those who were unemployed at the reform date could choose between the old and the new regime. We find that the new regime has a positive average causal effect on the job finding rate.

Restrictions for different functional forms of the matching function

We provide bounds on the parameters of matching functions such that the job-finding rate and the vacancy-filling rate are below 1. We do that in the context of the canonical search and matching model with a Pissarides-type free-entry condition. We find that the restrictions for a Cobb–Douglas matching function with increasing returns to scale are rather restrictive, involving an upper bound to future expected profits and the number of job searchers. In contrast, for functional forms with constant returns to scale (Cobb–Douglas, CES) the restrictions involve only parameters or an upper bound to the future expected profits. The paper also investigates when a job-finding rate (vacancy filling rate) below one can restrict the vacancy filling rate (job-finding rate) to be below and strictly bounded away from one. We provide the bounds implied by these “interior equilibria.”

Delayed collection of unemployment insurance in recessions

Using variations in UI policies over time and across U.S. states, this paper provides evidence that allowing unemployed workers to delay the collection of benefits increases their job-finding rate. In a model with discrete job take-up decisions, benefit entitlement, wage-indexed benefits, and heterogeneous job types, I demonstrate that the policy can increase an unemployed worker’s willingness to work, even though more benefits in general reduce the relative value of employment. In a calibrated quantitative model, I find that allowing delayed benefit collection increases the overall job finding rates and may lower unemployment rate both in a steady state stationary economy and over a transition path during 2008–2012.

The spike at benefit exhaustion: The role of measurement error in benefit eligibility

Many studies have found that the exit rate from unemployment insurance benefits to employment increases at the end of the entitlement period. The magnitude of this “spike” in the job finding rate at benefit exhaustion is important for assessing the distortionary effect of unemployment insurance, whereas the shape of the job finding rate around that point is informative about the validity of the competing theoretical models of job search. Using exceptionally rich register data for Finland, we show that difficulties in measuring the time to benefit exhaustion can lead to severely biased estimates of the job finding rate around benefit exhaustion. When the time to benefit exhaustion is accurately measured, the job finding rate starts to increase two months prior to benefit exhaustion and peaks sharply in the last week of benefit eligibility, after which its drops immediately below the pre-spike level.

Fiscal stimulus and unemployment dynamics

Abstract Focusing on both hiring and firing margins, this paper revisits effects of fiscal stimulus on unemployment. We develop a DSGE model with search frictions where job separation is endogenously determined. The predictions of the model are in contrast with earlier studies that assume exogenous separation. Our model can capture the empirical pattern of responses of the job finding, separation, and unemployment rates to a government spending shock, obtained from a structural VAR model with the US data. However, our model fails to capture the response of vacancies and the volatility of unemployment. We discuss the roles of cyclical movements of matching efficiency and labor force participation to fix this model’s shortcoming.

The effects of reducing the entitlement period to unemployment insurance benefits

This paper uses a difference-in-differences approach exploiting a substantial reform of the Dutch unemployment insurance law and a regression discontinuity design based on policy discontinuities prior to the reform to study the effects of the benefits entitlement period on job finding and subsequent labor market outcomes. Using detailed administrative data covering the full population, both identification strategies show that reducing the entitlement period increases the job finding rate. We find mixed results for the quality of the job-worker match, which we attribute to differences in the time period and the group of affected unemployed workers. However, all our estimation results show that a shorter benefits entitlement period substantially increases cumulative earnings. These increases in earnings are larger than the cumulative reduction in benefits payments.

Unemployment fluctuations over the life cycle

In this paper, we show that (i) the volatility of worker flows increases with age in US CPS data, and (ii)a search and matching model with life-cycle features, endogenous separation and search effort, is well suited to explain this fact. With a shorter horizon on the labor market, older workers’ outside options become less responsive to new employment opportunities, thereby making their wages less sensitive to the business cycle. Their job finding and separation rates are then more volatile along the business cycle. The horizon effect cannot explain the significant differences between prime-age and young workers as both age groups are far away from retirement. A lower bargaining power on the youth labor market brings the model closer to the data.

Waiting longer before claiming, and activating youth: no point?

PurposeThe purpose of this paper is to estimate the impact of two policies (an extension of the waiting period before entitlement to unemployment insurance (UI) and an intensification of counselling) targeted at unemployed school-leavers in Belgium on unemployment duration and on the quality of work.Design/methodology/approachThe length of both policies is sharply determined by two distinct age thresholds. These thresholds are exploited to estimate the impact within a regression discontinuity design using a large administrative data set of all recent labour market entrants.FindingsThe longer waiting period does not significantly impact job finding while the Youth Work Plan does increase the job-finding rate eight months after the onset of the programme. The accepted wage is unaffected, but both policies lower the number of working days resulting in lower earnings. This effect is especially prevalent for youth from low-income households.Research limitations/implicationsFor both policies, participation was delineated by an age cut-off which was only four months apart. This sizeably reduced the width of the age window to detect a corresponding discontinuity in behaviour and hereby also the statistical power of the estimator. Additionally, due to confounding policies the estimated effects are local treatment effects for highly educated youth around the age cut-offs.Social implicationsThe findings suggest that threatening with a sanction is not the right instrument to activate highly educated unemployed school-leavers. While supportive measures appear to be more effective, this may be partly a consequence of acceptance of lower quality jobs due to liquidity constraints and of caseworkers giving misleading advice that temporary jobs are stepping stones to long-term employment.Originality/valueTo the best of the authors’ knowledge, this is the first paper to estimate the impact of changing the waiting period in UI. The paper adds to the existing literature on the effects of counselling and UI design on employment and job quality.