Search, effort, and locus of control

• Laboratory investigation of the effect of locus of control on job search.
• Hypothesize more efficacious individuals believe the return to search effort is higher.
• Feelings of efficacy positively related to effort and reservation wages if return to effort is uncertain.
• Feelings of efficacy unrelated to effort and reservation wages when return to effort is certain.
• Complements results from survey data by identifying mechanism for locus of control to affect search.

We test the hypothesis that locus of control influences search by affecting beliefs about the efficacy of search effort in a laboratory experiment. Consistent with this hypothesis, we find that reservation wages and effort are increasing in the belief that one's efforts influence outcomes when subjects are not told how search effort affects search outcomes but are unrelated to these locus of control beliefs when subjects know the relationship between effort and search outcomes. This difference in the relationship between locus of control and search behavior across treatments cannot be explained by unmeasured skill or effort costs as the search technology and offer distribution do not vary across treatments. Only the scope for locus of control to influence beliefs differs and can explain the observed difference across treatments.