Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216501 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13189
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To better understand the underlying mechanisms, we conducted a large text-message-based survey of unemployed workers in Germany. We surveyed 6,800 UI recipients twice a week for 4 months about their job search effort. The panel structure allows us to observe how search effort evolves within individual over the unemployment spell. We provide three key facts: 1) search effort is flat early on in the UI spell, 2) search effort exhibits an increase up to UI exhaustion and a decrease thereafter, 3) UI recipients do not appear to time job start dates to coincide with the UI exhaustion point. A model of reference-dependent job search can explain these facts well, while a standard search model with unobserved heterogeneity struggles to explain the second fact. The third fact also leaves little room for a model of storable offers to explain the spike.
Subjects: 
unemployment
job search
reference dependence
survey
JEL: 
J64
J65
D91
Document Type: 
Working Paper

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