Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed

25 Pages Posted: 4 Sep 2011  

Stephen B. DeLoach

Elon University

Mark R. Kurt

Elon University

Date Written: May 27, 2011

Abstract

Discouraged and marginally attached workers have received increased attention from policy makers over the past several years. Theoretically, periods of recessions and high unemployment should directly influence individual’s decisions whether or not to search for employment, creating more discouraged workers. Since 2003, there have been a number of large macroeconomic shocks (e.g. housing bubble, credit crunch, mass layoffs, etc.) which should affect job search intensity. To date, the relative magnitude of these shocks on the search intensity of the unemployed (but currently undiscouraged workers) has not been established in the literature. Using daily time use dairies from the American Time Use Survey 2003-2009 allow us to proxy search intensity directly by aggregating time spent in minutes on several job search activities: time spent sending out resumes, contacting employers, interviewing, reading ads on the internet and so forth. Results from Tobit estimation indicate the existence of significant negative wealth effects on search intensity through changes in the stock market and housing values that help explain the apparent acyclicality of search intensity observed in the data.

Keywords: search intensity, macroeconomic shocks, discouraged workers, business cycles

JEL Classification: J2, J6, J1, E24, E32

Suggested Citation

DeLoach, Stephen B. and Kurt, Mark R., Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed (May 27, 2011). Available at SSRN: https://ssrn.com/abstract=1921644 or http://dx.doi.org/10.2139/ssrn.1921644

Stephen B. DeLoach (Contact Author)

Elon University ( email )

Department of Economics
Campus Box 2075
Elon, NC 27244
United States
336-278-5943 (Phone)
336-278-5952 (Fax)

Mark R. Kurt

Elon University ( email )

Elon, NC 27244
United States

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