Relative Efficiencies and Comparative Advantages in Job Search

Abstract

A model of employed and unemployed job search is estimated from a panel of new entrants into the labor force as well as prime-age workers. After investigating the relative efficiency of the two main search methods within a representative agent framework, I estimate the model under a specification that encompasses comparative advantages using the quit/layoff distinction and pretransition earnings. Overall, the data indicate that unemployed search is slightly more effective for younger workers and, particularly, for those with low earnings but significantly less effective than employed search for mature workers.