Unemployment Narratives

Narratives – the causal accounts people use to explain observed events -- play an important role in
human reasoning, yet their role in shaping economic beliefs and decisions in high-stakes real-world
settings is not well understood. To open this black box, we conduct surveys with Danish jobseekers
in which we use open-ended survey questions to measure narratives about the occurrence of long-
term unemployment. We document three sets of results. First, jobseekers and firm managers invoke
a rich and heterogeneous set of narratives to explain why some jobseekers become long-term unem-
ployed. Second, narratives strongly reflect jobseekers' personal experiences and circumstances.
Jobseekers‘ narratives strongly shift towards factors outside the control of unemployed individuals
over the course of the unemployment spell. In a planned third step, we will link jobseekers' survey
responses with rich click data from a search platform and study how narratives are related to a variety
of beliefs and behaviors in the job search context. We will also examine whether narratives help us
understand phenomena such as over-optimism about the chances of finding re-employment. Our find-
ings shed light on the importance of narratives in shaping important economic behaviors