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

Kory Kroft; Fabian Lange; Matthew J. Notowidigdo

doi:10.1093/qje/qjt015

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

Kory Kroft^*, Fabian Lange, Matthew J. Notowidigdo

^*Corresponding author for this work

Economics

Research output: Contribution to journal › Article › peer-review

299 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 language	English (US)
Pages (from-to)	1123-1167
Number of pages	45
Journal	Quarterly Journal of Economics
Volume	128
Issue number	3
DOIs	https://doi.org/10.1093/qje/qjt015
State	Published - Aug 2013

Funding

* We thank Marianne Bertrand, Eric Budish, Jon Guryan, Yosh Halberstam, Larry Katz (the editor), Rob McMillan, Phil Oreopoulos, Paul Oyer, Yuanyan Wan, four anonymous referees, and many seminar participants for helpful comments. We thank Thomas Bramlage, Rolando Capote, David Hampton, Mark He, Paul Ho, Angela Li, Eric Mackay, Aaron Meyer, Nabeel Thomas, Stephanie Wu, Steven Wu, Vicki Yang, and Dan Zangri for excellent research assistance. We thank Ben Smith for excellent research assistance and exceptional project management throughout the experiment, and we thank Bradley Crocker at HostedNumbers.com for assistance with setting up the local phone numbers used in the experiment. We gratefully acknowledge the Initiative on Global Markets and the Stigler Center at the University of Chicago Booth School of Business, the Neubauer Family Assistant Professorship, and the Connaught Fund for financial support.

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1093/qje/qjt015

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note = "Funding Information: * We thank Marianne Bertrand, Eric Budish, Jon Guryan, Yosh Halberstam, Larry Katz (the editor), Rob McMillan, Phil Oreopoulos, Paul Oyer, Yuanyan Wan, four anonymous referees, and many seminar participants for helpful comments. We thank Thomas Bramlage, Rolando Capote, David Hampton, Mark He, Paul Ho, Angela Li, Eric Mackay, Aaron Meyer, Nabeel Thomas, Stephanie Wu, Steven Wu, Vicki Yang, and Dan Zangri for excellent research assistance. We thank Ben Smith for excellent research assistance and exceptional project management throughout the experiment, and we thank Bradley Crocker at HostedNumbers.com for assistance with setting up the local phone numbers used in the experiment. We gratefully acknowledge the Initiative on Global Markets and the Stigler Center at the University of Chicago Booth School of Business, the Neubauer Family Assistant Professorship, and the Connaught Fund for financial support.",

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

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UN SDGs

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