Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2005:9: Labor market prospects search intensity and the transition from college to work

Bas van der Klaauw (), Aico van Vuuren () and Peter Berkhout ()
Additional contact information
Bas van der Klaauw: Free University Amsterdam, Postal: De Boelelaan 1105, NL-1081 HV Amsterdam, The Netherlands
Aico van Vuuren: Free University Amsterdam, Postal: De Boelelaan 1105, NL-1081 HV Amsterdam, The Netherlands
Peter Berkhout: University of Amsterdam, Postal: Roetersstraat 29, NL-1018 WB Amsterdam, The Netherlands

Abstract: In this paper we develop a structural model for job search behavior of students entering the labor market. The model includes endogenous search effort and on the job search. Since students usually do not start a regular job before graduation but start job search earlier, our model is not stationary. The model explains the common finding that a substantial share of individuals starts working immediately upon graduation. We estimate the model using a unique data set of individuals who completed undergraduate education in the Netherlands between 1995 and 2001. Our estimation results show that 1 percentage point decrease in unemployment rate increases wage offers on average with 3 percent and that there are substantial returns to work experience. Employment rates at graduation could be increased from 40 percent to 65 percent if alls students start job search 6 months prior to graduation.

Keywords: Job search behavior; structural model

JEL-codes: J64

55 pages, April 6, 2005

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