Explaining the increase in on-the-job search
by Mikal Skuterud
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 250
Context
Evidence from the Labour Force Survey (LFS) reveals that the percentage
of employed workers searching for other jobs more than doubled in Canada
between 1976 and 1995. Comparable evidence from the Current Population
Survey (CPS), Panel Study of Income Dynamics (PSID), and National Longitudinal
Survey (NLS) suggests that the U.S. experienced a remarkably similar
upward trend in on-the-job search (OJS) over this period.
Objectives
Using U.S. data to supplement the Canadian data wherever possible,
this paper attempts to explain this long-term, secular trend in Canadian
OJS rates by performing decomposition and industry-level analyses, and
by considering concomitant changes in employer-to-employer transition
rates and the wage returns to job changing.
Findings
The results from both countries suggest that an important part of the
upward trend in OJS rates is not explained by compositional effects,
including cohort effects. The OJS increase seems also to have occurred
independently of rising job insecurity due to sector-specific demand
shocks and trends in the dispersion of log wage residuals. The data
are most consistent with a long-term decrease in search costs.
Data Sources: Labour Force Survey.
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the full publication.
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