Short Term Gain, Long Term Pain

This paper examines the role of informal job search methods on the labour market outcomes of displaced workers. Informal job
search methods could alleviate short-term labour market difficulties of displaced workers by providing information on job
opportunities, allowing them to signal their productivity and may mitigate wage losses through better post-displacement job
matching. However if displacement results from reductions in demand for specific sectors/skills, the use of informal job search
methods may increase the risk of job instability. While informal job search methods are associated with lower wage losses,
they lead to increased job instability and increased risk of subsequent job displacement.