Giorgio Topa, Federal Reserve Bank of New York

Using a unique new survey, we study the relationship between search effort and employment outcomes for employed and non-employed job seekers. We find that the unemployed fare much worse than the employed in their job search prospects along several dimensions, despite higher job search effort. The unemployed receive fewer offers per job application, and conditional on an offer, they are offered lower pay, fewer benefits, and less hours. Despite this, they are more likely to accept these lower-quality job offers but are also much more likely to again engage in job search on their new job. In contrast, employed job seekers receive a higher fraction of both solicited and unsolicited job offers, and tend to generate many offers from referral networks with ties to their professional acquaintances. In fact, many employed workers are not seeking new work at all, and yet tend to generate more plentiful and higher-quality job offers than unemployed job seekers