Employed and Unemployed Job Seekers: Are They Substitutes?

40 Pages Posted: 11 Jul 2011

See all articles by Simonetta Longhi

Simonetta Longhi

University of Essex - Institute for Social and Economic Research (ISER); Institute for the Study of Labor (IZA); Tinbergen Institute

Mark Taylor

University of Essex

Abstract

The job search literature suggests that on-the-job search reduces the probability of unemployed people finding a job. However, there is no evidence that employed and unemployed job seekers are similar or apply for the same jobs. We combine the Labour Force Survey and the British Household Panel Survey to compare employed and unemployed job seekers in terms of individual characteristics, preferences over working hours, job-search strategies, and employment histories. We find substantial differences, which persist over the business cycle and remain after controlling for unobserved heterogeneity. We conclude that the unemployed do not directly compete with employed job seekers.

Keywords: on-the-job search, unemployment, job competition, employment histories, panel data

JEL Classification: J29, J60

Suggested Citation

Longhi, Simonetta and Taylor, Mark Philip, Employed and Unemployed Job Seekers: Are They Substitutes?. IZA Discussion Paper No. 5827. Available at SSRN: https://ssrn.com/abstract=1882846

Simonetta Longhi (Contact Author)

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

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

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

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Mark Philip Taylor

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 1206 873553 (Phone)
+44 1206 873 153 (Fax)

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