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Job Search, Hours Restrictions, and Desired Hours of Work

Free University Amsterdam

A structural empirical job search model is presented that incorporates the labor supply decision of individuals. The arrival of a job offer is modeled as a random draw from a wage‐hours offer distribution. Subjective information is used on desired working hours to identify optimal hours from offered hours. Policy simulations are performed to address several policy questions: Does a decrease in unemployment benefits lead to the acceptance of jobs with less preferred working hours? How does a decrease in the length of the standard working week affect the job acceptance behavior of the unemployed?