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Locus of Control and Job Search Strategies
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 future outcomes are determined by his or her own actions as opposed to external factors. 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 evidence that individuals with an internal locus of control search more and that individuals who believe that their future outcomes are determined by external factors have lower reservation wages.
Marco Caliendo studied economics at the Goethe-University of Frankfurt and the University of Manchester and graduated in April 2000 (Diplom-Volkswirt, equiv. M.A. Economics). From May 2000 until December 2004 he was PhD student at Goethe-University and worked as a research associate at the Institute of Statistics and Econometrics. In spring 2003 he was visiting scholar at the University College London (UCL). He received his PhD (summa cum laude) for his thesis on "Microeconometric Evaluation of Labour Market Policies" from Goethe-University in April 2005. From January 2005 until July 2007 he worked for the DIW in Berlin as a Senior Research Associate in the Public Economics Department.
His current research interests include the evaluation of labor market programs, self-employment/entrepreneurship, the influence of personality traits on economic outcomes, and applied microeconometrics. His work has been published in journals such as Oxford Bulletin of Economics and Statistics, Journal of Population Economics, Small Business Economics, Journal of Economic Surveys, Kyklos, Applied Economics and Advances in Econometrics.
He joined IZA as a Senior Research Associate in August 2007 and served as Deputy Program Director for the IZA research area "Evaluation of Labor Market Programs" until January 2009. In February 2009 he became Director of Research at IZA.