Opportunity, choice and reemployment rates: two-sided search and vacancy levels

Abstract

The previous chapter has addressed the determinants of unemployment duration mainly from a supply-side perspective, and has consequently described the relationships between worker characteristics like gender, age, ethnicity, education, occupation and industry in pre-unemployment jobs and exit rates from unemployment back into work. Although descriptively informative, these analyses have been limited by the fact that the statistical models applied so far have accurately described individual propensities to exit unemployment for work, yet have not specified the underlying mechanisms generating the observed duration distributions more explicitly. Despite having adopted a terminology that might be read to imply a supply-centered explanation of unemployment duration in the previous chapter, the current chapter is intended to emphasize that worker choices are probably much less problematic in explaining unemployment duration than is commonly assumed. According to the results gained in the preceding analyses, workers would seem to prefer to secure adequate reemployment quickly, i.e. seek to fmd jobs offering adequate earnings and job security. If workers have the means to sustain job searches, they will try to obtain relatively adequate reemployment in that sense. On the other hand, the more constraining workers’ material and psychosocial circumstances, the more workers will tend to compromise on aspects of job quality in favor of finding reemployment.