TY  - RPRT
        AU  - Frijters, Paul
AU  - Klaauw, Bas van der
        TI  - Job Search with Nonparticipation
        PY  - 2004/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1407
        UR  - https://www.iza.org/publications/dp1407
        AB  - In a non-stationary job search model we allow unemployed workers to have a permanent
option to leave the labor force. Transitions into nonparticipation occur when reservation
wages drop below the utility of being nonparticipant. Taking account of these transitions
allows the identification of duration dependence in the job offer arrival rate and the wage offer
distribution. We estimate the structural model with individual data from the German Socio-
Economic Panel and use simulated maximum likelihood. The results show that the presence
of significant negative duration dependence in the wage offer distribution causes reservation
wages to decrease. The rate at which job offers arrive is constant over the unemployment
duration. These findings provide micro evidence that the job search environment of
unemployed workers is non-stationary because of loss of skills.
        KW  - endogenous nonparticipation
KW  - non-stationary job search
KW  - duration
        ER  -