TY  - JOUR
AU  - DellaVigna,Stefano
AU  - Paserman,M. Daniele
TI  - Job Search and Impatience
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10837
PY  - 2004
Y2  - October 2004
UR  - http://www.nber.org/papers/w10837
L1  - http://www.nber.org/papers/w10837.pdf
N1  - Author contact info:
Stefano DellaVigna
University of California, Berkeley
Department of Economics
549 Evans Hall #3880
Berkeley, CA 94720-3880
Tel: 510/643-0715
Fax: 510/642-6615
E-Mail: sdellavi@econ.berkeley.edu

Daniele Paserman
Department of Economics
Boston University
270 Bay State Road
Boston, MA 02215
Tel: 1-617-3535695
Fax: 1-617-3534449
E-Mail: paserman@bu.edu
AB  - How does impatience affect job search? More impatient workers search less intensively and set a lower reservation wage. The effect on the exit rate from unemployment is unclear. In this paper we show that, if agents have exponential time preferences, the reservation wage effect dominates for sufficiently patient individuals, so increases in impatience lead to higher exit rates. The opposite is true for agents with hyperbolic time preferences: more impatient workers search less and exit unemployment later. Using two large longitudinal data sets, we find that various measures of impatience are negatively correlated with search effort and the exit rate from unemployment, and are orthogonal to reservation wages. Overall, impatience has a large effect on job search outcomes in the direction predicted by the hyperbolic discounting model.
ER  -