IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp15971.html
   My bibliography  Save this paper

Wage-Specific Search Intensity

Author

Listed:
  • Rendon, Silvio

    (Inter-American Development Bank)

Abstract

I propose a model in which agents decide on job search intensity for each possible wage, unlike the usual setup of constant search intensity over wage draws. The proposed framework entails efficiency gains in that agents do not waste effort to searching for low paying unacceptable jobs or less offered high paying jobs. The proposed framework generates accepted wages distributions that differ substantially from the truncated distributions stemming from the usual setup. These different empirical implications are exploited for building two nonparametric tests, which reject constant search intensity over wages, using NLSY97 data. I further estimate the identifiable structural parameters of the two models resulting in better fit for the wage-specific setup. I quantify the increased effectiveness of wage-specific search in more total search intensity, faster transitions to the upper tail of the wage distribution, and higher wages, in particular, more than 25% increase in accepted wages after unemployment.

Suggested Citation

  • Rendon, Silvio, 2023. "Wage-Specific Search Intensity," IZA Discussion Papers 15971, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15971
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp15971.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hans G. Bloemen, 2005. "Job Search, Search Intensity, and Labor Market Transitions: An Empirical Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    2. Benhabib, Jess & Bull, Clive, 1983. "Job Search: The Choice of Intensity," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 747-764, October.
    3. Fabien Postel-Vinay & Jean-Marc Robin, 2004. "To Match or Not to Match? Optimal Wage Policy With Endogenous Worker Search Intensity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(2), pages 297-330, April.
    4. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    5. Rasmus Lentz, 2009. "Optimal Unemployment Insurance in an Estimated Job Search Model with Savings," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 37-57, January.
    6. Eran Yashiv, 2000. "The Determinants of Equilibrium Unemployment," American Economic Review, American Economic Association, vol. 90(5), pages 1297-1322, December.
    7. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 869-891.
    8. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January.
    9. David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," American Economic Review, American Economic Association, vol. 97(2), pages 113-118, May.
    10. Stephen DeLoach & Mark Kurt, 2013. "Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed," Journal of Labor Research, Springer, vol. 34(4), pages 433-454, December.
    11. Fabien Postel-Vinay & Jean-Marc Robin, 2004. "To match or not to match? Optimal wage policy with endogenous worker search intensity," SciencePo Working papers hal-03587620, HAL.
    12. Guido Menzio, 2007. "A Theory of Partially Directed Search," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 748-769, October.
    13. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
    14. Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2005. "On-the-Job Search and the Wage Distribution," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 31-58, January.
    15. Lentz, Rasmus, 2010. "Sorting by search intensity," Journal of Economic Theory, Elsevier, vol. 145(4), pages 1436-1452, July.
    16. Jesper Bagger & Rasmus Lentz, 2019. "An Empirical Model of Wage Dispersion with Sorting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 153-190.
    17. Gautier, Pieter A. & Moraga-González, José L., 2018. "Search intensity, wage dispersion and the minimum wage," Labour Economics, Elsevier, vol. 50(C), pages 80-86.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gautier, Pieter A. & Moraga-González, José L. & Wolthoff, Ronald P., 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," IZA Discussion Papers 3045, Institute of Labor Economics (IZA).
    2. Pieter Gautier & Jose Luis Moraga-Gonzalez & Ronald Wolthoff, 2007. "Structural Estimation of Search Intensity: Do non-employed workers search hard enough?," 2007 Meeting Papers 695, Society for Economic Dynamics.
    3. Kaas Leo, 2010. "Variable Search Intensity with Coordination Unemployment," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-33, October.
    4. Gomme, Paul & Lkhagvasuren, Damba, 2015. "Worker search effort as an amplification mechanism," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 106-122.
    5. Ping Yan, 2013. "How much do Workers Search?," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 249-277, May.
    6. Gautier, Pieter A. & Moraga-González, José L. & Wolthoff, Ronald P., 2016. "Search costs and efficiency: Do unemployed workers search enough?," European Economic Review, Elsevier, vol. 84(C), pages 123-139.
    7. Hie Joo Ahn & Ling Shao, 2017. "Precautionary On-the-Job Search over the Business Cycle," Finance and Economics Discussion Series 2017-025, Board of Governors of the Federal Reserve System (U.S.).
    8. Christopher Taber & Rune Vejlin, 2020. "Estimation of a Roy/Search/Compensating Differential Model of the Labor Market," Econometrica, Econometric Society, vol. 88(3), pages 1031-1069, May.
    9. Pei, Yun & Xie, Zoe, 2021. "A quantitative theory of time-consistent unemployment insurance," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 848-870.
    10. Julien Prat, 2010. "The rate of learning-by-doing: estimates from a search-matching model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(6), pages 929-962.
    11. Bart COCKX & Muriel DEJEMEPPE & Andrey LAUNOV & Bruno VAN DER LINDEN, 2011. "Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model," LIDAM Discussion Papers IRES 2011042, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    12. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
    13. Masters, Adrian, 2011. "Commitment, advertising and efficiency of two-sided investment in competitive search equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 35(7), pages 1017-1031, July.
    14. Di Addario, Sabrina & Kline, Patrick & Saggio, Raffaele & Sølvsten, Mikkel, 2023. "It ain’t where you’re from, it’s where you’re at: Hiring origins, firm heterogeneity, and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 340-374.
    15. Maarek, Paul, 2012. "Labor share, informal sector and development," MPRA Paper 38756, University Library of Munich, Germany.
    16. Zuchuat, Jeremy & Lalive, Rafael & Osikominu, Aderonke & Pesaresi, Lorenzo & Zweimüller, Josef, 2023. "Duration Dependence in Finding a Job: Applications, Interviews, and Job Offers," IZA Discussion Papers 16602, Institute of Labor Economics (IZA).
    17. Ahn Hie Joo & Shao Ling, 2021. "The Cyclicality of On-the-Job Search Effort," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(1), pages 185-220, January.
    18. Joonbae Lee & Hanna Wang, 2023. "Ranking and search effort in matching," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(1), pages 113-136, January.
    19. Aleksander Berentsen & Guido Menzio & Randall Wright, 2011. "Inflation and Unemployment in the Long Run," American Economic Review, American Economic Association, vol. 101(1), pages 371-398, February.
    20. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.

    More about this item

    Keywords

    job search; search intensity; unemployment;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp15971. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.