Effective administration of unemployment insurance (UI) is central to its ability to smooth consumption and act as an automatic stabilizer. The federal government’s method of allocating funds to administer UI gives the states no incentive to provide quality service at reasonable cost. We first document the deteriorating performance of the UI system in recent recessions and present estimates of a descriptive model relating state workloads to performance. We then characterize UI administration as a standard principal-agent problem, which leads to a method of allocating funds that would motivate states to adopt new technologies and improve performance. 

This paper documents that rotation group bias — the tendency for labor force statistics to vary systematically by month in sample in labor force surveys — in the Current Population Survey (CPS) has worsened considerably over time. The estimated unemployment rate for earlier rotation groups has grown sharply relative to the unemployment rate for later rotation
groups; both should be nationally representative samples. The rise in rotation group bias is driven by a growing tendency for respondents to report job search in earlier rotations relative to later rotations. We investigate explanations for the change in bias. We find that rotation group bias increased discretely after the 1994 CPS redesign and that rising nonresponse is likely a significant contributor. Survey nonresponse increased after the redesign, and subsequently trended upward, mirroring the time pattern of rotation group bias. Consistent with this explanation, there is only a small increase in rotation group bias for households that responded in all eight interviews. An analysis of rotation group bias in
Canada and the U.K. reveal no rotation group bias in Canada and a modest and declining
bias in the U.K. There is not a “Heisenberg Principle” of rotation group bias, whereby the bias is an inherent feature of repeated interviewing. We explore alternative weightings of the unemployment rate by rotation group and find that, despite the rise in rotation group bias, the official unemployment does no worse than these other measures in predicting alternative measures of economic slack or fitting key macroeconomic relationships.

This paper asks whether disclosing wages to the public changes wage setting at the top of the public sector income distribution. I evaluate a 2010 California mandate that required cities to submit municipal salaries to the State, to be posted on a public website. City managers—typically the highest paid employees—in cities that had not previously disclosed salaries experienced average compensation declines of approximately 8 percent relative to cities where at the time of the mandate manager wages were already in the public domain. This decline was largely accomplished through nominal pay cuts. The wage cuts were not the result of relatively greater financial stress, as the overall wage bill did not diverge between these sets of cities. Wages were cut irrespective of whether or not they were out of line with (measured) fundamentals. Consequently, the residual variance of manager wages did not decline. Following new disclosure the city manager quit rate increased by 75 percent, suggesting that transparency pressured cities to lower the wages that were already close to reservation levels. The evidence is more consistent with a “populist” response to perceptions of excessive salaries than with the effects of increased accountability.

We estimate the effect of the reduction in credit supply that followed the 2008 financial crisis on the real economy. We predict county lending shocks using variation in pre-crisis bank market shares and estimated bank supply-shifts. Counties with negative predicted shocks experienced declines in small business loan originations, indicating that it is costly for these businesses to find new lenders. Using confidential microdata from the Longitudinal Business Database, we find that the 2007-2009 lending shocks accounted for statistically significant, but economically small, declines in both small firm and overall employment. Predicted lending shocks affected lending but not employment from 1997-2007.

We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit
amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.

In this paper we examine how an unanticipated cut in potential unemployment insurance (UI) duration, which reduced maximum duration in Missouri by 16 weeks, affected the search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate that a one-month reduction in maximum duration is associated with 15 fewer days of UI receipt and 8.6 fewer days of nonemployment. We use the RDD estimates to simulate the change in the time path of the unemployment rate assuming there are no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment, the labor market was able to absorb this influx of workers without crowding out other jobseekers.

We examine whether the recent expansions in Medicaid from the Affordable Car Act reduced
“employment lock” among childless adults who were previously ineligible for public
coverage. We compare employment in states that chose to expand Medicaid versus those that
chose not to expand, before and after implementation. We find that although the expansion
increased Medicaid coverage by 3.0 percentage points among childless adults, there was no
significant impact on the employment.

We use a field experiment to study how workers value alternative work arrangements. During the
application process to staff a national call center we randomly offered applicants choices between traditional
M-F 9 am – 5 pm office positions and alternatives. These alternatives include flexible scheduling,
working from home, and positions that give the employer discretion over scheduling. We randomly
varied the wage difference between the traditional option and the alternative, allowing us to estimate
the entire distribution of willingness to pay (WTP) for these alternatives. We validate our results using
a nationally-representative survey. The great majority of workers are not willing to pay for flexible
scheduling relative to a traditional schedule: either the ability to choose the days and times of work or
the number of hours they work. However, the average worker is willing to give up 20% of wages to
avoid a schedule set by an employer on a week’s notice. This largely represents workers’ aversion to
evening and weekend work, not scheduling unpredictability. Traditional M-F 9 am – 5 pm schedules are
preferred by most jobseekers. Despite the fact that the average worker isn’t willing to pay for scheduling
flexibility, a tail of workers with high WTP allows for sizable compensating differentials. Of the worker friendly
options we test, workers are willing to pay the most (8% of wages) for the option of working
from home. Women, particularly those with young children, have higher WTP for work from home and
to avoid employer scheduling discretion. They are slightly more likely to be in jobs with these amenities,
but the differences are not large enough to explain any wage gaps.

We study the time-series properties of firm effects in the two-way fixed effects model popularized by Abowd, Kramarz, and Margolis (1999) (AKM) using two approaches. The first—the rolling AKM approach (R-AKM)—estimates AKM models separately for successive two-year intervals. The second—the time-varying AKM approach (TV-AKM)—is an extension of the original AKM model that allows for unrestricted interactions of year and firm indicators. We apply to both approaches the leave-out methodology of Kline, Saggio and Sølvsten (2020) to correct for biases in the estimated variance components. Using administrative wage records from Washington State, we find, first, that firm effects for hourly wage rates are highly persistent with an autocorrelation coefficient between firm effects in 2002 and 2014 of 0.74. Second, the R-AKM approach reveals cyclicality in firm effects and worker-firm sorting. During the Great Recession the variability in firm effects increased, while the degree of worker-firm sorting decreased. Third, misspecification of standard AKM models resulting from restricting firm effects to be fixed over time appears to be minimal.

We estimate the magnitudes of reduced earnings, work hours, and wage rates of workers displaced during the Great Recession using linked employer-employee panel data from Washington State. Displaced workers’ earnings losses occurred mainly because hourly wage rates dropped at the time of displacement and recovered sluggishly. Lost employer-specific premiums explain only 17 percent of these losses. Fully 70 percent of displaced workers moved to employers paying the same or higher wage premiums than the displacing employers, but these workers nevertheless suffered substantial wage rate losses. Loss of valuable specific worker employer
matches explain more than half of the wage losses.