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search unemployment


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Unemployment which occurs while an unemployed worker searches the job market for an acceptable job offer. In some occupations workers may leave one job voluntarily because search for another is more efficiently conducted while not working. In many professional occupations this does not happen, because being unemployed is itself a handicap in attracting offers: workers who want better jobs can search more efficiently while employed. If they lose their jobs involuntarily, however, search unemployment occurs if they do not simply apply for any job and accept any offer. Unemployed workers seeking jobs have reservation wages, that is, minimum acceptable pay offers, and cut-offs for the type of work they are willing to perform. If they do not receive acceptable job offers, their reservation wage and minimum job specifications change, probably falling as lack of income reduces their liquidity and failure to find acceptable jobs depresses their expectations about the distribution of potential offers.

Subjects: Economics.


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