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An empirical analysis of on-the-job search and job-to-job transitions

Author

Listed:
  • Shigeru Fujita
Abstract
This paper provides a set of simple, yet overlooked, facts regarding on-the-job search and job-to-job transitions using the UK Labour Force Survey (LFS). The LFS is unique in that it asks employed workers whether they search on the job and, if so, why. The author finds that workers search on the job for very different reasons, which lead to different outcomes in both mobility and wage growth. A nontrivial fraction of workers engage in on-the-job search due to a fear of losing their job. This group mimics many known features of unemployed workers, such as wage losses upon finding a job. Workers also search on the job because they are unsatisfied. This group is roughly equally split into those who are unsatisfied with pay and those who are unsatisfied with other aspects of their job. Distinguishing these two groups allows the author to highlight the importance of the nonpecuniary value of a job. He further shows that the evidence that firms make a counteroffer in response to a worker's outside offer is scarce and that wage outcomes at the time of job-to-job transitions are closely linked to the worker's outside option. The evidence in this paper contributes not only to deepening our understanding of labor reallocation, but it also suggests the fruitful directions of future research in the labor search literature.

Suggested Citation

  • Shigeru Fujita, 2010. "An empirical analysis of on-the-job search and job-to-job transitions," Working Papers 10-34, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:10-34
    as

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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2010/wp10-34r.pdf
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    References listed on IDEAS

    as
    1. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November.
    2. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8grh35j2 is not listed on IDEAS
    3. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Post-Print hal-03458567, HAL.
    4. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms985085gkbp is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Philip Jung & Moritz Kuhn, 2019. "Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 678-724.
    2. Chassamboulli, Andri & Fontaine, Idriss & Gálvez-Iniesta, Ismael & Gomes, Pedro, 2024. "Immigration and labour market flows," Labour Economics, Elsevier, vol. 86(C).
    3. Andri Chassamboulli & Idriss Fontaine & Ismael Gálvez-Iniesta & Pedro Gomes, 2024. "Immigration and labour market flows," Post-Print hal-04768515, HAL.
    4. Damdinsuren, Erdenebulgan & Zaharieva, Anna, 2023. "Expectation formation and learning in the labour market with on-the-job search and Nash bargaining," Labour Economics, Elsevier, vol. 81(C).
    5. Martin, Daniel & Pierrard, Olivier, 2014. "On-the-job search and cyclical unemployment: Crowding out vs. vacancy effects," Journal of Economic Dynamics and Control, Elsevier, vol. 44(C), pages 235-250.
    6. Gomes, Pedro, 2012. "Labour market flows: Facts from the United Kingdom," Labour Economics, Elsevier, vol. 19(2), pages 165-175.

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    More about this item

    Keywords

    Job satisfaction; Job security; Labor market; Employment;
    All these keywords.

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