Duration dependence and labor market conditions: Evidence from a field experiment

Kory Kroft*, Fabian Lange, Matthew J. Notowidigdo

*Corresponding author for this work

Research output: Contribution to journalArticle

184 Scopus citations

Abstract

This article studies the role of employer behavior in generating "negative duration dependence"-the adverse effect of a longer unemployment spell-by sending fictitious résumés to real job postings in 100 U.S. cities. Our results indicate that the likelihood of receiving a callback for an interview significantly decreases with the length of a worker's unemployment spell, with the majority of this decline occurring during the first eight months. We explore how this effect varies with local labor market conditions and find that duration dependence is stronger when the local labor market is tighter. This result is consistent with the prediction of a broad class of screening models in which employers use the unemployment spell length as a signal of unobserved productivity and recognize that this signal is less informative in weak labor markets.

Original languageEnglish (US)
JournalQuarterly Journal of Economics
Volume128
Issue number3
DOIs
StatePublished - Aug 2013

ASJC Scopus subject areas

  • Economics and Econometrics

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