On the Job Search and Job Competition: Relevance and Wage Impact in the UK

Publication type

Conference Paper


Joint Empirical Social Science Seminar


Publication date

February 21, 2007


In the literature job competition is often measured by the unemployment rate. By neglecting on-the-job search, however, the unemployment rate is likely to be a biased measure of job competition: various studies have suggested that on-the-job search varies over time and across groups of people, and might have a relevant impact on the outflow from unemployment. In the UK, for example, less than half of people who are actively looking for a job are unemployed; the other half already has a job.

This paper estimates the direct impact of job competition on individual wages in the UK using data from the quarterly Labour Force Survey for the period 1993-2005. Measures of job competition based only on the unemployment rate are compared to measures that account for on-the-job search as well as regional accessibility. The results suggest that job competition has a negative impact on wages, and that this impact is not equally distributed across workers.

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