unemployment

Author
Abstract
The purpose of this paper is to summarize a certain line of work on
the interpretation of unemployment in the analysis of male labour supply
behavior. Specifically, this work investigates whether the data support
the null hypothesis that individuals experiencing unemployment are on a
labour supply function, and if the data do not support this hypothesis,
how might a researcher proceed in empirical work. The motivation for
doing this is two fold. First, what unemployment represents is an
intrinsically interesting question, and may have implications beyond
labour supply analysis in terms of macroeconomic theory. Second, if
unemployed workers are constrained in the sense that they are off their
individual labour supply functions, standard labour supply estimation
may involve a fundamental misspecification of the equation. However, it
should be emphasized that the purpose of this paper is to survey one
possible approach to this problem; the paper does not attempt to provide
a general survey on labour supply estimation or on constraints in the
labour market.
Year of Publication
1985
Number
195
Date Published
06/1985
Publication Language
eng
Citation Key
In Unemployment, Search and Labour Supply, ed. Richard Blundeall and Ian Walker (Cambridge, New York and Sydney:Cambridge University Press, 1986)
Ham, J. (1985). On the Interpretation of Unemployment in Empirical Labour Supply Analysis. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01b8515n380 (Original work published 06/1985AD)
Working Papers
Abstract
Observations and Conjectures on the U.S. Employment Miracle
This paper has three goals. First, to place U.S. job growth in international perspective
by exploring cross-country differences in employment and population growth. This section finds
that the U.S has managed to absorb added workers -- especially female workers -- into
employment at a greater rate than most countries. The leading explanation for this phenomenon
is that the U.S. labor market has flexible wages and employment practices, whereas European
labor markets are rigid. The second goal of the paper is to evaluate the labor market rigidities
hypothesis. Although greater wage flexibility probably contributes to the U.S.'s comparative
success in creating jobs for its population, the slow growth in employment in many European
countries appears too uniform across skill groups to result from relative wage inflexibility alone.
Furthermore, a great deal of labor market adjustment seems to take place at a constant real wage
in the U.S. This leads to the third goal: To speculate on other explanations why the U.S. has
managed to successfully absorb so many new entrants to the labor market. We conjecture that
product market constraints contribute to the slow growth of employment in many countries.
Year of Publication
1997
Number
390
Date Published
08/1997
Publication Language
eng
Citation Key
8248
Pischke, J. -S., & Krueger, A. (1997). Observations and Conjectures on the U.S. Employment Miracle. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01d217qp51c (Original work published 08/1997AD)
Working Papers
Author
Abstract
This study proposes and implements a specification test for the
hypothesis that unemployment represents intertemporal labour supply
behavior. The test allows for uncertainty and endogenous unemployment.
Given standard specifications of the intertemporal labour supply model, I
find strong evidence against this interpretation of unemployment. These
results indicate the need to turn to either 1) alternative models where
unemployed workers are off a supply function or ii) more complex models
of intertemporal substitution.
Year of Publication
1985
Number
196
Date Published
06/1985
Publication Language
eng
Citation Key
The Review of Economic Studies, Vol. 53, No. 4, Econometrics Special Issue, August 1986
Ham, J. (1985). Testing Whether Unemployment Represents Intertemporal Labor Supply Behavior. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01ng451h50f (Original work published 06/1985AD)
Working Papers
Author
Abstract
During the 1980s, many European countries introduced fixed-term contracts to fight high
and persistent levels of unemployment. Although these contracts have been widely used,
unemployment remains about the same after fifteen years. This paper builds a theoretical
model to reconcile these facts. I analyze the labor market effect of the introduction of
fixed-term contracts in an efficiency wage model. The form of incentive compatible fixed-
term contracts and the firm’s choice of contracts are studied. Permanent contracts are the
standard way to offer incentives, but fixed-term contracts are cheaper. This generates an
externality, which can make employment higher in the system with only permanent contracts.
As a consequence, from a social point of view, the share of fixed-term contracts is too large.
Increases in the renewal rate of fixed-term contracts into permanent contracts lead to higher
employment levels. The model highlights the interaction between different rigidities in the
labor market. Aggregate employment and the share of temporary contracts are affected in
the same way by firing costs and the flexibility of wages.
Year of Publication
2000
Number
433
Date Published
03/2000
Publication Language
eng
Citation Key
8352
Guell, M. (2000). Fixed-term Contracts and Unemployment: an Efficiency Wage Analysis. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01zc77sq114 (Original work published 03/2000AD)
Working Papers
Author
Abstract
This paper presents a survey of recent microeconometric studies of
the labor market, focusing on research that emphasizes the possible
failure of measured wage rates to separate individual supply and demand
decisions. On both the demand and supply sides of the labor market
there is evidence that forces from the other side of the market
influence employment outcomes through some mechanism other than the
wage. On the supply side, this evidence takes the form of correlations
between individual labor supply outcomes and market—level measures of
employment demand in the individual's local labor market. On the demand
side, it takes the form of correlations between firms’ employment decisions and measures of their employees‘ outside opportunities. Both sets
of findings are inconsistent with simple supply and demand models, and
suggest the need for alternative models of the labor market, which
permit an uncoupling of short-run employment decisions from wage rates.
Year of Publication
1987
Number
228
Date Published
11/1987
Publication Language
eng
Citation Key
8354
Card, D. (1987). Supply and Demand in the Labor Market. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01pz50gw11t (Original work published 11/1987AD)
Working Papers
Abstract
We propose a new econometric estimation method for analyzing the probability of leaving unemployment
using uncompleted spells from repeated cross-section data, which can be especially
useful when panel data are not available. The proposed method-of-moments-based estimator
has two important features: (1) it estimates the exit probability at the individual level and (2)
it does not rely on the stationarity assumption of the inflow composition. We illustrate and
gauge the performance of the proposed estimator using the Spanish Labor Force Survey data,
and analyze the changes in distribution of unemployment between the 1980s and 1990s during
a period of labor market reform. We find that the relative probability of leaving unemployment
of the short-term unemployed versus the long-term unemployed becomes significantly higher in
the 1990s.
Year of Publication
2003
Number
475
Date Published
05/2003
Publication Language
eng
Citation Key
8357
Guell, M., & Hu, L. (2003). Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-section Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp019p290934d (Original work published 05/2003AD)
Working Papers
Abstract
This paper provides new evidence on job search intensity of the unemployed in the U.S., modeling job search intensity as time allocated to job search activities. The main findings are: 1) the average unemployed worker in the U.S. devotes about 41 minutes to job search on weekdays, which is substantially more than his or her European counterpart; 2) workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker; 3) across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between -1.6 and -2.2; 4) the predicted wage is a strong predictor of time devoted to job search, with an elasticity in excess of 2.5; 5) job search intensity for those eligible for Unemployment Insurance (UI) increases prior to benefit exhaustion; 6) time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for UI. A nonparametric Monte Carlo technique suggests that the relationship between job search effort and the duration of unemployment for a cross-section of job seekers is only slightly biased by length-based sampling.
Year of Publication
2008
Number
532
Date Published
08/2008
Publication Language
eng
Citation Key
8384
Krueger, A., & Mueller, A. (2008). Job Search and Unemployment Insurance: New Evidence from Time Use Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01th83kz34p (Original work published 08/2008AD)
Working Papers
Author
Abstract
I focus on two aspects of Job loss. First, I examine evidence on the
incidence of job loss by worker and job characteristics including age,
education, race, sex, industry, and tenure over the period from 1982 to 1991.
Second, I examine the cost of job loss to workers in the form of 1) lower
post-displacement employment probabilities, 2) lower probabilities of
full-time employment for re—employed workers, and 3) lower earnings for
full-time workers.
Using data from Displaced Workers Surveys (DWS) from 1984 through 1992
to study job loss from 1982-91, I find that older workers and more educated
workers are relatively more likely to suffer a job loss in the latter part of
this period. Additionally, job loss became more common in some important
service industries and relatively less common in manufacturing during the
latter part of the ten-year period studied.
Supplementing the DWS data with data from the outgoing rotation groups
of the Current Population Survey from 1982-1991, I find that displaced workers
are, relative to non-displaced workers, 1) less likely to be employed and 2)
more likely to be employed part-time conditional on being employed. These
effects seem to decline with time since displacement. There is no systematic
secular change in these costs of displacement, either in the aggregate or for
particular groups. Finally, I examine the earnings losses of full-time
re—employed displaced workers by comparing their earnings change with the
earnings change of full-time employed workers who were not displaced. I find,
consistent with what others have found, that these earnings losses are
substantial.
Overall, the costs to displaced workers of job loss are substantial and
come in several forms. However, the public perception that the current
sluggish economy is worse than earlier downturns may reflect more who has lost
jobs recently rather than either increased overall job loss or increased costs
to those who are losing Jobs.
Year of Publication
1993
Number
309
Date Published
01/1993
Publication Language
eng
Citation Key
Brookings Papers on Economic Activity: Microeconomics, 1993.
Farber, H. (1993). The Incidence and Costs of Job Loss: 1982-1991. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01tb09j5655 (Original work published 01/1993AD)
Working Papers
Abstract
Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers’ access to UI. Although the expansion’s aim is to smooth the
income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large: In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles.
Year of Publication
2015
Number
591
Date Published
09/2015
Publication Language
eng
Citation Key
9246
Leung, P., & O’Leary, C. (2015). Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kw52jb45x (Original work published 09/2015AD)
Working Papers
Author
Abstract
This paper provides new evidence on time use and subjective well-being of employed and unemployed individuals in 14 countries. We devote particular attention to characterizing and modeling job search intensity, measured by the amount of time devoted to searching for a new job. Job search intensity varies considerably across countries, and is higher in countries that have higher wage dispersion. We also examine the relationship between unemployment benefits and job search.
Year of Publication
2008
Number
524
Date Published
05/2008
Publication Language
eng
Citation Key
7865
Krueger, A. (2008). The Lot of the Unemployed: A Time Use Perspective. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01w37636771 (Original work published 05/2008AD)
Working Papers