Locus of Control and Job Search Strategies

36 Pages Posted: 15 Feb 2010

See all articles by Marco Caliendo

Marco Caliendo

University of Potsdam; Institute for the Study of Labor (IZA)

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

Arne Uhlendorff

IZA Institute of Labor Economics

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Abstract

Standard job search theory assumes that unemployed individuals have perfect information about the effect of their search effort on the job offer arrival rate. In this paper, we present an alternative model which assumes instead that each individual has a subjective belief about the impact of his or her search effort on the rate at which job offers arrive. These beliefs depend in part on an individual's locus of control, i.e., the extent to which a person believes that future outcomes are determined by his or her own actions as opposed to external factors. We estimate the impact of locus of control on job search behavior using a novel panel data set of newly-unemployed individuals in Germany. Consistent with our theoretical predictions, we find evidence that individuals with an internal locus of control search more and that individuals who believe that their future outcomes are determined by external factors have lower reservation wages.

Keywords: job search behavior, search effort, reservation wage, locus of control, unemployment duration

JEL Classification: J64

Suggested Citation

Caliendo, Marco and Cobb-Clark, Deborah A. and Uhlendorff, Arne, Locus of Control and Job Search Strategies. IZA Discussion Paper No. 4750. Available at SSRN: https://ssrn.com/abstract=1552684

Marco Caliendo (Contact Author)

University of Potsdam ( email )

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Institute for the Study of Labor (IZA) ( email )

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Deborah A. Cobb-Clark

School of Economics, University of Sydney ( email )

606 Social Sciences Bldg. (A02)
The University of Sydney
Sydney, NSW 2006
Australia
61435061387 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Arne Uhlendorff

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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