Job Insecurity, Unemployment Insurance, and On-the-Job Search

I use the Health and Retirement Study to document that job insecurity is an important factor behind on-the-job search. I find that job insecurity can explain 25 of the cases in which older workers report to be looking for another job. Then, I analyze whether unemployment insurance can affect this relationship between job insecurity and job search. I find evidence that unemployment insurance discourages on-the-job search, which in turn reduces the probability of starting a job at a new employer and increases the probability of entering non-employment. The strength of these effects depends on the worker s level of job insecurity.