Two-step on-the-job search-Evidence from Taiwan

This study decomposes on-the-job search into two-step procedures. The first step is concerned with the dissatisfaction with the current job, and is very sensitive to the wage gap and other observed factors. The second step is concerned with initiating an on-the-job search, and is insensitive to the wage gap and most other observed factors. It is likely that the one-step approach overstates these observed factors, while it understates the unobserved factors that give rise to the subjective probability of finding a better job in the behavior of on-the-job search.