An Empirical Analysis of On-the-Job Search and Job-to-Job Transitions

A previous version of this working paper was originally published as Reality of On-the-Job Search in October 2010.

The LFS is unique in that it asks employed workers whether they search on the job and, if so, why. The author finds that workers search on the job for very different reasons, which lead to different outcomes in both mobility and wage growth. A nontrivial fraction of workers engage in on-the-job search due to a fear of losing their job. This group mimics many known features of unemployed workers, such as wage losses upon finding a job. Workers also search on the job because they are unsatisfied with their job. The unsatisfied workers are roughly equally split into “unsatisfied with pay” and “unsatisfied with other aspects.” These two groups differ significantly with respect to their wage outcome upon job-to-job transitions. These findings suggest that it is important to explicitly consider the heterogeneity of OJS for studying the aggregate wage distribution as well as the individual wage evolution.