Authors	Caliendo, M., Cobb-Clark, D. and Uhlendorff, A.
Year	2010
Reference	IZA Discussion Paper 4750, Bonn.
Keywords	Job Search Behavior, Search Effort, Reservation Wage, Locus of Control, Unemployment Duration
JEL-Classification	J64
Presentations	2009 EEA in Barcelona, 2009 EALE in Tallin, 2010 AEA in Atlanta.
Download	IZA Discussion Paper from February 2010: PDF
Abstract	Standard job search theory assumes that unemployed individuals have perfect information about the effect of their search effort on the job offer arrival rate. In this paper, we present an alternative model which assumes instead that each individual has a subjective belief about the impact of his or her search effort on the rate at which job offers arrive. These beliefs depend in part on an individual's locus of control, i.e., the extent to which a person believes that his or her own actions determine future outcomes. We estimate the impact of locus of control on job search behavior using a novel panel data set of newly-unemployed individuals in Germany. Consistent with our theoretical predictions, we find that individuals with an internal locus of control have higher reservation wages and search more intensively than individuals with an external locus of control.