The Behavioral Economics of Persistent Unemployment: New Evidence on Psychological Frictions in Job Search

The effects of long-term unemployment on individuals include not only increased economic hardship, but also diminished mental and physical health, marital instability, lower life satisfaction, and lower educational achievement for the children of unemployed parents. Recent research suggests that unemployed individuals' job searches may reflect psychological factors—such as diminished self-esteem, discouragement, and anxiety or depression—that traditional unemployment policies do not account for. 

Economist Saurabh Bhargava will analyze a proprietary dataset that tracks job application data and search behavior for millions of adult job seekers to study both how individuals search for jobs and how the psychological consequences of unemployment affect their job searches. He will also conduct a field experiment that tests whether psychologically-informed interventions can help improve search efficacy.