Searching for Job Security and the Consequences of Job Loss

Job loss comes with large present value earnings losses which elude workhorse models of unemployment and labor market policy. I propose a parsimonious model frictional in jobs differ terms risk workers search off‐ on‐the‐job. This gives rise to job ladder slippery bottom rungs where spells beget spells. allow for human capital respond time spent out work estimate the framework on German Social Security data. The captures joint response wages, employment, measure empirically. key driver “unemployment scar” is security its interaction evolution and, particular, better employment.