What Can Explain the Hump-Shaped Job Search Intensities Over the Life-Cycle?

41 Pages Posted: 9 Mar 2021

Date Written: January 14, 2021

Abstract

This paper explores the puzzling inverted U-shape job search profile for U.S. data. It is well established that the standard life-cycle incomplete market model is incapable of explaining this phenomenon because of the wealth effect. I argue two channels to explain the puzzle: (i) the resolution of perceived risks through Bayesian learning, and (ii) wealth accumulation in the incomplete market over the life-cycle. To support this, I empirically and analytically show that unemployed job seekers devote less efforts to find jobs under higher uncertainty and wealth.

JEL Classification: D52, D83, E21, J64

Suggested Citation

Kang, ShinHyuck, What Can Explain the Hump-Shaped Job Search Intensities Over the Life-Cycle? (January 14, 2021). Available at SSRN: https://ssrn.com/abstract=3766000 or http://dx.doi.org/10.2139/ssrn.3766000

ShinHyuck Kang (Contact Author)

Korea Labor Institute ( email )

9th Flr., Korea Federation of Small Business Bldg
16-2 Youido-dong, Yongdungpo-gu
Seoul 150-010
Korea

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