Josef Zweimüller

An unemployed worker’s chances to find a new job decreases with the duration of unemployment. While this fact is well documented, the reasons are not well understood. This paper quantifies the extent to which (i) job applications sent by job seekers and (ii) firms’ callback decision can account for duration dependence. Exploiting data from the Swiss unemployment register on firms’ responses (callbacks and job offers) for each single job application, we find that the declining job finding rate is due to both fewer applications and lower callback rates, but callbacks are about twice as important as applications. Dynamic selection is accounted for by individual fixed-effects in the case of applications; and by the CV characteristics observed by firms in the case of callbacks.