Job security drives European job search while pay leads in US market
An ECB working paper by Bick, Dias da Silva, and Weißler reveals that 13 percent of European workers and 19 percent of U.S. workers actively search while employed. While job security concerns drive European searchers, American workers look primarily for higher pay.
Climbing ladders versus seeking shelter
The study analyzes panel data from the ECB Consumer Expectations Survey across eleven euro area countries alongside NY Fed survey data for the United States.
Across both regions, employed workers represent over 60 percent of all job seekers, and searching on the job increases the probability of changing employers sixfold.
However, fundamental motives diverge sharply.
In the United States, pay satisfaction has roughly three times the impact on job search engagement compared to job loss expectations.
In Europe, this pattern reverses, with job loss expectations exerting 1.5 times the impact of pay satisfaction.
Furthermore, around 40 percent of workers in both regions continue searching even after successfully switching employers.
Institutional roots of labor mobility
Regional labor market institutions explain this divergence in search behavior.
In Europe, stronger employment protections and persistent long-term unemployment make job security particularly valuable, forcing workers to seek precautionary moves.
In the United States, wider income dispersion creates stronger financial incentives to climb the wage ladder.
Cross-country patterns confirm this link, as nations with higher long-term unemployment display stronger precautionary search motives, whereas countries with higher income inequality exhibit higher search rates driven by pay dissatisfaction.
Security trumps ambition in European labor
These findings demonstrate how rigidities restrict efficient labor reallocation across European economies.
Defensive job search driven by fear of unemployment yields lower productivity gains than wage-driven mobility.
Policymakers must address structural rigidities to convert precautionary job switching into genuine economic growth.