Employed and unemployed job seekers and the business cycle

Longhi, S. ORCID: https://orcid.org/0000-0003-4115-3321 and Taylor, M. (2014) Employed and unemployed job seekers and the business cycle. Oxford Bulletin of Economics and Statistics, 76 (4). pp. 463-483. ISSN 1468-0084 doi: 10.1111/obes.12029

Abstract/Summary

The job search literature suggests that on-the-job search reduces the probability of un employed people finding jobs. However, there is little evidence that employed and unemployed job seekers are similar or apply for the same jobs. We compare employed and unemployed job seekers in their individual characteristics, preferences over working hours, job-search strategies and employment histories, and identify how differences vary over the business cycle. We find systematic differences which persist over the business cycle. Our results are consistent with a segmented labour market in which employed and unemployed job seekers are unlikely to directly compete with each other for jobs.