Dimensions of Job Search

The theory of job search, as we have discussed it so far, is somewhat one-dimensional. The New Classical theory seems to imply that, if a person loses a forty-hour job, then the person will spend forty hours in "job search." This makes sense if "waiting for a better offer" is the same thing as "job search." But "waiting" is not the same thing as "job search." The unemployed person may spend one day in job search and four days at the shore. Nor does that mean he's goofing off. He may have opportunities for only one day's search - only two or three interviews to go to. Further, job search may be more or less productive, depending on the circumstances. It may be that, even if the job hunter spends all week at interviews, his chances of having an offer are pretty bad at the end of the week.

In fairness to the New Classical Theory, the assumption that waiting for a better offer is the same as job search is a simplifying assumption. We need simplifying assumptions in economics, and we have gotten along with plenty of them. But to understand the flows into and out of unemployment, we need a more complex and realistic picture of job search. We need to take account of

The dimension of opportunity

How many potential job contacts does the person have, in a given period?

The dimension of effort

How many of the contacts does he pursue? How hard does he work at it?

The dimension of productivity

By "productivity" of job search we mean the probability of a successful match in a particular period. How much will increased effort improve his chances?

Example