Occupational Choice and Learning du ring Job Search: The Role of an Employment Agency (joint with Kenn eth Mirkin)
Abstract: We investigate learning about occupational fit during unemployment, an d in particular the role of the employment agency in improving market effic iency. The unemployed are heterogeneous in and imperfectly informed about t heir ability in each occupation. In each occupation, better searching worke rs are more likely to be hired. Hence, workers learn about their ability fr om job search outcomes. Conceptually, this setting entails a bandit model o f occupational choice embedded in a frictional labor market equilibrium. We characterize the search behavior that a planner would choose and compare i t to equilibrium behavior. Among those with high beliefs in the more produc tive occupation, those who also have high beliefs in the other occupation s hould search longer in the productive occupation than they are themselves w illing to. In turn, those having low beliefs in the other occupation should begin searching there sooner than they would individually prefer. Similar results are discussed for all other types. Policies that incentivize worker s to search over a broader set of occupations exist in most OECD countries, and these results shed light on the types of workers that should be subjec ted to them and the ones that should not. Efficiency of learning during une mployment has not been yet characterized in the random search literature, a nd this offers a new perspective on the role of government employment agenc ies. Similarly, the bandit literature has not given much attention to equil ibrium considerations that arise naturally due to search externalities. We prove these results by considering deviations from a symmetric equilibrium allocation in a continuous time model.
DTSTAMP:20260406T032453Z DTSTART:20170522T173000Z DTEND:20170522T190000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR