Searching With A Job in Hand or The Behavior of the Temporarily Laid-Off Worker with a Reference to Unemployment Compensation

摘要

The report analyzes the search behavior of a worker on temporary lay-off. It shows that there are only three search strategies that possibly can be optimal for the worker to pursue. These are: to never search throughout the lay-off, to search in every period of the lay-off, and to search in the first portion of the lay-off but not search in the latter. The report demonstrates that increases in unemployment insurance benefits and costs of search, and decreases in the risk of the distribution of wages can reduce the search efforts of the worker and definitely increase the minimum wage-offer he will accept.