The Marginal Efficiency of Active Search

During recessions, a larger fraction of non-employed workers actively search for a job. Simultaneously, the premium in the job-finding probability for active relative to passive search declines. I document this novel finding and show that it is symptomatic of a “crowding-out” of active search that is not accommodated under the standard approach of the literature. I estimate a declining marginal efficiency of active search, and I show that, during a recession, active search plays a less important role for finding a job. The findings emphasize the importance of the participation margin in understanding unemployment dynamics and the role of policy.

Date

Speaker

Venue

Registration