Liquidity constraints, unemployed job search and labour market outcomes

Ruud Gerards, Ricardo Welters

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Liquidity constraints prompt the unemployed to intensify their job search, but does that produce better labour market outcomes? Using longitudinal Australian data, we test the effect of objective proxy indicators of liquidity constraints on job search and concomitant labour market outcomes. We find that liquidity constraints, specifically their severe form ‘hardship’, intensify job search without improving short‐run employment outcomes or objective job quality (if a job is secured), whereas subjective job quality outcomes are worse. Moreover, we find evidence that the quit intention is higher and the concomitant medium‐run employment stability is lower for those who found jobs facing hardship.
Original languageEnglish
Pages (from-to)625-646
Number of pages22
JournalOxford Bulletin of Economics and Statistics
Volume82
Issue number3
Early online date5 Nov 2019
DOIs
Publication statusPublished - Jun 2020

JEL classifications

  • j64 - Unemployment: Models, Duration, Incidence, and Job Search
  • j01 - Labor Economics: General
  • j28 - "Safety; Job Satisfaction; Related Public Policy"

Keywords

  • CASH-ON-HAND
  • MATCH QUALITY
  • PERSONALITY
  • DURATION
  • BENEFITS
  • REEMPLOYMENT
  • ESTIMATORS
  • HARDSHIP
  • BEHAVIOR
  • WORK

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