Abstract This article models a frictional labour market where employers endogenously discriminate against the long-term unemployed. The estimated model replicates recent experimental evidence which documents that interview invitations for observationally equivalent workers fall sharply as unemployment duration progresses. We use the model to quantitatively assess the consequences of such employer behaviour for job finding rates and long-term unemployment and find only modest effects given the large decline in callbacks. Interviews lost to duration impact individual job finding rates solely if they would have led to jobs. We show that such instances are rare when firms discriminate in anticipation of an ultimately unsuccessful application. Discrimination in callbacks is thus largely a response to dynamic selection, with limited consequences for structural duration dependence and long-term unemployment.

Abstract This article investigates gender differences in the job search process in the field and lab. Our analysis is based on rich information on initial job offers and acceptances from undergraduates of Boston University’s Questrom School of Business. We find (i) a clear gender difference in the timing of job offer acceptance, with women accepting jobs substantially earlier than men, and (ii) a sizable gender earnings gap in accepted offers, which narrows in favor of women over the course of the job search period. To understand these patterns, we develop a job search model that incorporates gender differences in risk aversion and overoptimism about prospective offers. We validate the model’s assumptions and predictions using the survey data and present empirical evidence that the job search patterns in the field can be partly explained by the greater risk aversion displayed by women and the higher levels of overoptimism displayed by men. We replicate these findings in a laboratory experiment that features sequential job search and provide direct evidence on the purported mechanisms. Our findings highlight the importance of risk preferences and beliefs for gender differences in job-finding behavior and, consequently, early-career wage gaps among the highly educated.