Job Search and Academic Achievement
Bas van der Klaauw
Aico van Vuuren
European Economic Review 54, 298-320.
The paper develops a structural model for the labor market behavior of
students entering the labor market. We explicitly model the
trade-off between devoting effort to studying and to job search.
Furthermore, we allow for on-the-job search. The model is estimated
using a unique data set of individuals who completed undergraduate
education in the Netherlands between 1995 and 2001. Our estimation
results show that labor market returns of high grades are low. Wage
increases between jobs are explained by labor market friction
rather than returns of early work experience. Our results indicate
that a 1 percentage point decrease in the unemployment rate
increases wage offers on average by 3 percent, but that the amount of
job search effort is not very sensitive to business cycle
fluctuations. Policy simulations show that study effort and hence
academic achievement are much more sensitive to financial incentives
than job search effort and labor market outcomes.
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Last updated: February 17, 2010.