Labor Market Prospects, Search Intensity and the Transition from College to Work

52 Pages Posted: 22 Jun 2004

See all articles by Bas van der Klaauw

Bas van der Klaauw

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Aico van Vuuren

Erasmus University Rotterdam (EUR) - Department of Economics

Peter H. G. Berkhout

University of Amsterdam - SEO Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: June 2004

Abstract

In this paper we develop a structural model for job search behavior of students entering the labor market. The model includes endogenous search effort and on-the-job search. Since students usually do not start a regular job before graduation but start job search earlier, our model is non stationary even if all structural parameters are constant. The model explains the common finding that a substantial share of individuals starts working immediately upon graduation. We estimate the model using a unique data set of individuals who completed undergraduate education in the Netherlands between 1995 and 2001. Our estimation results show that a 1 percent point decrease in unemployment rate increases wage offers with 3 percent, that there are substantial returns to work experience and that individuals devote less effort to job search than optimal. Employment rates at graduation could be increased from 40 percent to 65 percent if all individuals start job search 6 month prior to graduation.

Keywords: Business cycle, structural estimation, return to work experience

JEL Classification: C41, I20, J64

Suggested Citation

van der Klaauw, Bas and van Vuuren, Aico and Berkhout, Peter H. G., Labor Market Prospects, Search Intensity and the Transition from College to Work (June 2004). IZA Discussion Paper No. 1176; Tinbergen Institute Discussion Paper No. TI 04-064/3. Available at SSRN: https://ssrn.com/abstract=557219

Bas Van der Klaauw (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6120 (Phone)
+31 20 444 6005 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Aico Van Vuuren

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 4082158 (Phone)
+31 10 4089149 (Fax)

Peter H. G. Berkhout

University of Amsterdam - SEO Economic Research ( email )

Roetersstraat 29
Amsterdam, 1018 WB
Netherlands

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