In this paper we study the labour market behavior of employed individuals that have entrepreneurial aspirations in addition to aspirations to switch job. We analyze empirically these two “search processes” and, inspired by Lazear’s (2002) recent jack-ofall-trades hypothesis, focus specifically on the effects of varied experience on them. We report three main findings. First, entrepreneurial asp...

This paper incorporates job search through personal contacts into an equilibrium matching model with a segregated labour market. Job search in the public submarket is competitive which is in contrast with the bargaining nature of wages in the informal job market. Moreover, the social capital of unemployed workers is endogenous depending on the employment status of their contacts. This paper sho...

Using two data sets derived from German administrative data, including a linked employer-employee data set, we investigate the cyclicality of worker and job flows. The analysis stresses the importance of two-sided labour market heterogeneity in this context, taking into account both observed and unobserved characteristics. We find that small firms hire mainly unemployed workers, and that they d...

While it is intuitively plausible that using contacts in job search benefits a job-seeker, there is still both theoretical disagreement and inconclusive empirical evidence on why a job-seeker’s social capital is associated with her labor-market outcomes (for reviews, see Mouw 2003, 2006). We take an important step toward identifying the source of this association by proposing a direct test for ...

Introducing Time-to-Educate in a Job Search Model Transition patterns from school to work differ considerably across OECD countries. Some countries exhibit high youth unemployment rates, which can be considered an indicator of the difficulty facing young people trying to integrate into the labor market. At the same time, education is a time-consuming process, and enrolment and dropout decisions...

This paper uses panel data on jobs and windfalls to investigate the impact of wealth on job choices in a framework of multidimensional jobs. In a labour market characterised by informational frictions, windfalls (lottery wins, inheritance...) are expected to affect job durations differentially depending on job quality (here measured by subjective job satisfaction). The impact of unanticipated w...

Unemployment dynamics differ markedly between the United States and Germany: over the 1980s and 1990s, spells of unemployment have been considerably shorter, and sectoral mobility rates were consistently higher among displaced workers in the United States than those experienced by German workers. In the light of earlier research on Germany’s strongly skilland occupation-based labor market struc...

We develop and empirically test a labor market model with Public Employment Agencies (PEA) in order to understand why not all vacancies use the costless services provided by the PEA. We show that both the search market and the PEA can be active in equilibrium. In such an equilibrium, workers with a higher productivity have a higher chance of receiving a job offer and hence a higher value of sea...

This paper characterises optimal unemployment insurance (UI) and optimal tax policy in an equilibrium matching framework where job search effort is unobserved by the Planner. Policy design takes into account congestion externalities (greater job search effort by an individual worker reduces the re-employment rate of other competing job seekers) and thick market externalities (greater job creati...