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63 BizEd March/April 2014 Cog e nt-MAr keti ng /th i n ksto Ck During financial Downturns, markets pay close attention to the unemployment rate. But just as impor- tant to an economic recovery is the "discouraged worker effect," which refers to the factors that lead some unem- ployed workers to give up their searches altogether, say Mark Kurt, assistant professor of economics, and Steve DeLoach, professor of economics, both of Elon Univer- sity's Love School of Business in North Carolina. Past research shows that the high cost of a job search, a poor likelihood of success, and an expecta- tion of lower wages can drive the discouraged worker effect. Kurt and DeLoach wanted to learn how job search intensity also might be affected by distant mac- roeconomic shocks such as statewide mass layoffs, stock market fluctuations, and housing values. The pair examined data from the U.S. Bureau of Labor Statistics' American Time Use Survey 2003-09, which asked participants to keep diaries of their daily job search activities. Kurt and DeLoach found that a 5 percent decrease in stock prices on the S&P 500 increases job search time by more than 4 minutes in a week. "While this appears small," the authors write, "recall that the stock market fell by about 50 percent in the first half of 2009." The Discouraged Worker Effect steve Deloach Mark Kurt Reports of mass layoffs in a per- son's state of residence lead to a decrease in search intensity, counter- acting the effect of a stock market dip on a job search. A decrease in local housing prices, however, pro- duces only a slight increase in search time, likely because information about housing prices is not so widely available. Ironically, large increases in stock market prices can lead to a decrease in job search intensity among the unemployed—a phenomenon Kurt and DeLoach call "the wealth effect." These findings could have implica- tions for policymakers, the authors write. Policymakers should take into account the effect of macroeconomic events on job search intensity as they consider changes in fiscal policy or tax reform. "Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed" appears in the December 2013 Journal of Labor Research. n wEaltH BuilDing the Moscow school of Man- agement skolkovo in russia has opened the Wealth Man- agement and Philanthropy Centre. the center will focus on areas such as asset man- agement, succession planning, and philanthropy for russian entrepreneurs, service provid- ers, charitable organizations, and regulators. Veronica Misyu- tina, a former partner of Price- waterhouseCoopers in russia, will act as center director. n BEst in financE Cambridge Judge Business school in the United kingdom has launched the Centre for Compliance and trust to explore the financial industry, including the way it functions, responds to regulation, and adopts practices to meet standards of compliance. the center will develop tools to help finance professionals adopt effective compliance strategies and respond to regulatory changes. n gloBal sMEs the schulich school of Business at York University in toronto has opened the Centre for global enterprise, a "one-stop consulting, research, and teaching hub" to help Canada's small and medium-sized businesses expand their global exports and international reach. n BEst rEPorting Pace University's Lubin school of Business in new York City has opened its new Center for excel- lence in Financial reporting. the center will hold confer- ences, promote research, and plan activities aimed at enhancing reporting practices. Upcoming & ongoing