Academic Literature

Job Search / The longer a person is unemployed, the less it matters which method is used

Each month, every unemployed CPS respondent answers the question “What have you been doing in the last four weeks to find work?” The survey allows respondents to indicate one or more methods from a list of seven or, after 1994, 13. The methods are broadly categorized as either “active” or “passive.” An active job search method directly brings potential employers and employees into contact and could result in a job offer without any further action from the job seeker. A passive method, such as attending a job training program or updating a resume, may eventually improve the likelihood of finding a job but does not bring job seekers and employers into direct contact. To be considered unemployed, rather than out of the labor force, respondents must use at least one active method. To analyze the data from 1976 to 2011, we reclassified responses after 1994 into the pre-1994 scheme with the new active methods appearing after 1994 reclassified as “other.” New passive methods were placed into the “nothing” category, which we relabeled “passive.”

Table 1 shows the percentage of total job searches conducted over the entire period that used each method. Unsurprisingly, job seekers most commonly reported contacting potential employers directly: Nearly two-thirds of all job searches taking place from 1976 to 2011 involved direct contact. In addition to being the most common, this method was also among the most successful. Only 6.7 percent of job seekers reported using a private employment agency to find work. Those who did fared relatively poorly; this method had one of the lowest job-finding rates in the first month of unemployment, second only to using a public employment agency.

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Many job seekers reported using multiple methods, some of which were more likely to be used together than others. Table 2 shows the fraction of job seekers who used the method listed in the row if they had also used the method listed in the column. For instance, among those using passive methods of search, only 46 percent also directly contacted potential employers. Thirty-four percent of those who talked to friends and family also placed or answered job ads, more often than an average searcher. Interestingly, those who reported using a public employment agency were also more likely than average to have tried a private employment agency.

Convergence of Finding Rates

The data reflect a long-observed feature of the labor market: The longer an individual is unemployed, the less likely he or she is to find a job. We also found that the longer a person is unemployed, the less it matters which method is used to search for a job: All the finding rates fall and converge with one another.

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In the first month of unemployment, the job-finding rates show a fair amount of dispersion, ranging from 46 percent for those contacting an employer directly to 32 percent for those using passive search methods.

However, after a year of unemployment, the difference is only about 5 percentage points. If passive methods are excluded, the difference between the most- and least-productive job-search methods is only about 2 percentage points. Figure 1 illustrates these two features of the data: (1) that the likelihood of finding a job falls with the length of unemployment, and (2) that the method of search has little impact for the long-term unemployed.

Chosen excerpts by Job Market Monitor. Read the whole story at via Job Searching: Some Methods Yield Better Results than Others.

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