Job search with nonparticipation
Frijters, Paul & van der Klaauw, Bas (2006) Job search with nonparticipation. The Economic Journal, 116(508), pp. 45-83.
In a non-stationary job search model we allow unemployed workers to have a permanent option to leave the labour force. Transitions into nonparticipation occur when reservation wages drop below the utility of being nonparticipant. Taking account of these transitions allows the identification of duration dependence in the job offer arrival rate and the wage offer distribution. We estimate the structural model with individual data from the German Socio-Economic Panel and use simulated maximum likelihood. The results show that the presence of significant negative duration dependence in the wage offer distribution causes reservation wages to decrease. The rate at which job offers arrive is constant over the unemployment duration. These findings provide micro evidence that the job search environment of unemployed workers is non-stationary because of loss of skills.
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|Item Type:||Journal Article|
|Keywords:||labour markets, nonparticipation, non stationary search, job activation policy, loss, of, skill, discouragement|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
|Copyright Owner:||Copyright 2006 Blackwell Publishing|
|Copyright Statement:||The definitive version is available at www.blackwell-synergy.com|
|Deposited On:||14 Jun 2006 00:00|
|Last Modified:||29 Feb 2012 13:20|
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