March 2017

Precautionary On-the-Job Search over the Business Cycle

Hie Joo Ahn and Ling Shao


This paper provides new evidence for cyclicality in the job-search effort of employed workers, on-the-job search (OJS) intensity, in the United States using American Time Use Survey and various cyclical indicators. We find that OJS intensity is countercyclical along both the extensive and intensive margins, with the countercyclicality of extensive margin stronger than the other. An increase in the layoffs rate and the deterioration in expectations about future personal financial situation are the primary factors that raise OJS intensity. Our findings suggest that the precautionary motive in the job search is a crucial driver of the countercyclicality in OJS intensity.

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Keywords: On-the-job search, business cycles, labor flows, time use


PDF: Full Paper

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Last Update: January 09, 2020