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Explaining the increase in on-the-job search

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 US experienced a remarkably similar upward trend in on-the-job search (OJS) over this period. Using US 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. 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.

Evidence from the Labour Force Survey (LFS) reveals that the percentage of employed workers searching for other jobs more ...  Show Full Abstract  

Authors: Skuterud, Mikal
Corporate authors: Statistics Canada. Analytical Studies Branch
Date: 2005
Geographic subjects: North America; Canada; United States
Resource type: Report
Series name: Statistics Canada Analytical Studies Branch research paper series
Subjects: Outcomes; Statistics; Income;

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