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|Abstract:||How do unemployed individuals allocate their time spent on job search over their life-cycle? While a vast literature has considered the lifecycle dynamics of economic variables correlated with well being, such as consumption, housing, and labor supply, there is limited evidence on how individuals adjust their job search behavior over time in response to unemployment shocks. This omission reflects the lack of data that can be used to consistently measure the input of time in the production of job opportunities for individuals. A notable exception is Krueger and Mueller (2012), who document how the level of job search time varies across countries and discuss some age effects on job search. In this paper we document more systematically the allocation of time spent on job search over the life cycle using time use survey data from the United States and other countries. Using the American Time Use Survey (ATUS), we find a striking hump-shaped profile of US time spent on job search. The unemployed between the ages 21 and 25 spend roughly 2.2 hours per week searching for a job. Job search time increases sharply over the life cycle and reaches a maximum of roughly 6.6 hours per week for the unemployed between the ages 46 and 50. Even unemployed between the ages 56 and 65 seem to spend more time searching for jobs relative to the young. We also document that most of the variation in life-cycle job search time is accounted for by the extensive margin, that is, the decision to participate in job search activities. These life-cycle patterns are relatively stable across demographic groups. However, the life-cycle profiles of job search time look very different in other countries. Using data from the Multinational Time Use Survey (MTUS), we show that for most countries other than the United States the profile of job search time is decreasing over the life cycle. Finally, we discuss the implications of lifecycle theory for the intertemporal allocation of job search time. In standard life-cycle models with incomplete markets, an increasing profile of assets over the life cycle implies a declining job search time. This is because unemployed with accumulated assets have the option to run down their assets and insure themselves against unemployment shocks rather than search for a new job. The more assets unemployed have accumulated, the lower is their propensity to search for a job. If older unemployed have accumulated more assets relative to younger unemployed, their job search time will be lower. Therefore, the humpshaped profile of job search time observed in the United States is difficult to rationalize within standard life-cycle models. We conclude by discussing other factors which can explain the hump-shaped profile of job search time.|
|Citation:||Aguiar, Mark, Hurst, Erik, Karabarbounis, Loukas. (2013). The Life-Cycle Profile of Time Spent on Job Search. American Economic Review, 103 (111 - 116). doi:10.1257/aer.103.3.111|
|Pages:||111 - 116|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||American Economic Review|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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