scholarly journals Unemployment Insurance as a Housing Market Stabilizer

2018 ◽  
Vol 108 (1) ◽  
pp. 49-81 ◽  
Author(s):  
Joanne W. Hsu ◽  
David A. Matsa ◽  
Brian T. Melzer
Keyword(s):  
Housing Market ◽  
Unemployment Insurance ◽  
Mortgage Default ◽  
The Great Recession ◽  
Labor Market Shocks ◽  
Market Shocks ◽  
Home Values ◽  
The Unemployed ◽  
The Impact ◽  
Benefits And Costs

This paper studies the impact of unemployment insurance (UI) on the housing market. Exploiting heterogeneity in UI generosity across US states and over time, we find that UI helps the unemployed avoid mortgage default. We estimate that UI expansions during the Great Recession prevented more than 1.3 million foreclosures and insulated home values from labor market shocks. The results suggest that policies that make mortgages more affordable can reduce foreclosures even when borrowers are severely underwater. An optimal UI policy during housing downturns would weigh, among other benefits and costs, the deadweight losses avoided from preventing mortgage defaults. (JEL D14, E32, G21, J65, R31)

The impact of unemployment insurance on employment norms and income levels: the inevitable drift into 'reduced activity'

2000 ◽  
Vol 6 (4) ◽  
pp. 592-611
Author(s):  
Carole Tuchszirer
Keyword(s):  
Unemployment Insurance ◽  
Insurance Fund ◽  
Unemployment Benefit ◽  
Full Time ◽  
Unemployed People ◽  
The Unemployed ◽  
The Impact ◽  
Low Pay ◽  
Reduced Activity ◽  
Better Than

The aim of this article is to analyse a specific set of support instruments for the unemployed, namely those introduced in 1986 by the bipartite French unemployment insurance fund (UNEDIC) for those in casual employment. Under the new scheme, unemployed people were able to combine a limited income from casual employment with a part of their unemployment benefit, for a period of up to 18 months. Based on the dubious assumption that even precarious employment is better than full-time unemployment, this opportunity was designed to induce the unemployed to take up employment of any kind. The article considers in detail the economic and social context prevailing prior to the introduction of these measures, concluding that precarious, casual employment far from serves as a springboard to permanent employment, but that, on the contrary, it may lead an increasing number of people into underemployment and low-pay traps.

The role of non-formal lifelong learning at different points in the business cycle

2018 ◽  
Vol 39 (2) ◽  
pp. 334-352 ◽  
Author(s):  
Helena Corrales-Herrero ◽  
Beatriz Rodríguez-Prado
Keyword(s):  
Business Cycle ◽  
Lifelong Learning ◽  
Labour Market Situation ◽  
Content Type ◽  
The Great Recession ◽  
Market Situation ◽  
The Business Cycle ◽  
The Individual ◽  
The Unemployed ◽  
The Impact

Purpose Despite the widely recognised importance of lifelong learning, there are mixed results on its causal economic impact. The purpose of this paper is to investigate how economic conditions change the composition of participants in non-formal lifelong learning and whether the business cycle is relevant for the impact of non-formal lifelong learning on employability. Design/methodology/approach Non-linear decomposition techniques and matching estimators based on multidimensional covariates are applied to the Spanish sample of the European Adult Education Survey. The analysis controls for background, human capital and personal traits and draws a distinction between unemployed and employed workers. Findings The results show major differences in the volume and composition of participants before and during the Great Recession. In addition, there is a business cycle dependence of the effectiveness of non-formal lifelong learning that varies with the individual labour market situation. While lifelong learning proves more effective for the unemployed in recessions, for the employed the impact is greater in expansions. Originality/value The paper provides new evidence on the scant results of the moderating effect of the business cycle on the impact of lifelong learning. The analysis is not restricted to training implemented within public programmes, but rather extends to any kind of non-formal lifelong learning undertaken by unemployed and employed workers. In this sense, the analysis provides information about the optimal moment to invest in lifelong learning from both the policymaker and individual as well as firm perspective.

scholarly journals Unemployment Insurance Generosity and Aggregate Employment

2021 ◽  
Vol 13 (2) ◽  
pp. 58-99
Author(s):  
Christopher Boone ◽  
Arindrajit Dube ◽  
Lucas Goodman ◽  
Ethan Kaplan
Keyword(s):  
Unemployment Insurance ◽  
Aggregate Demand ◽  
Negative Effects ◽  
The Great Recession ◽  
Point Estimates ◽  
Maximum Benefit ◽  
State Variation ◽  
Population Ratio ◽  
The Impact ◽  
Rule Out

This paper examines the impact of unemployment insurance (UI) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, there is no statistically significant impact of increasing UI generosity on aggregate employment. Point estimates are uniformly small in magnitude, and the most precise estimates rule out employment-to-population ratio reductions in excess of 0.35 percentage points from the UI extension. The results contrast with the negative effects implied by most micro-level labor supply studies and are consistent with both job rationing and aggregate demand channels. (JEL E24, E32, J22, J23, J65)

The Impact of the Great Recession on Child Poverty in Greece

2017 ◽  
Author(s):  
Manos Matsaganis
Keyword(s):  
Great Recession ◽  
Trade Unions ◽  
Child Poverty ◽  
Professional Associations ◽  
The Great Recession ◽  
Policy Responses ◽  
The Status ◽  
Effects On Children ◽  
The Unemployed ◽  
The Impact

This chapter discusses the impact of the crisis (and of policy responses) on children in Greece. The Great Recession has been far more painful and protracted in that country than elsewhere. While some of its effects on children will take years to unfold, others are visible already. The very fact that the economic crisis was allowed to become a social emergency in the first place implies that policy responses failed to rise to the occasion. The reasons for that failure are to be found in the ‘politics of welfare retrenchment’. Defenders of the status quo, from trade unions to professional associations with good connections to the political establishment, have been relatively successful in resisting austerity cuts. As a result, the burden of fiscal consolidation has fallen on less powerful categories, leaving little space for policies aimed at protecting the real victims of the recession: the unemployed and the poor.

Losses on Dutch residential mortgage insurances

2014 ◽  
Vol 7 (3) ◽  
pp. 307-326 ◽  
Author(s):  
M.K. Francke ◽  
F.P.W. Schilder
Keyword(s):  
Housing Market ◽  
Loss Probability ◽  
Mortgage Default ◽  
Home Equity ◽  
Current Crisis ◽  
Data Set ◽  
Content Type ◽  
Mortgage Insurance ◽  
Dutch Housing ◽  
The Impact

Purpose – This paper aims to study the data on losses on mortgage insurance in the Dutch housing market to find the key drivers of the probability of loss. In 2013, 25 per cent of all Dutch homeowners were “under water”: selling the property will not cover the outstanding mortgage debt. The double-trigger theory predicts that being under water is a necessary but not sufficient condition to predict mortgage default. A loss for the mortgage insurer is the result of a default where the proceedings of sale and the accumulated savings for postponed repayment of the principal associated to the loan are not sufficient to repay the loan. Design/methodology/approach – For this study, the authors use a data set on losses on mortgage insurance at a national aggregate level covering the period from 1976 to 2012. They apply a discrete time hazard model with calendar time- and duration-varying covariates to analyze the relationship between year of issue of the insurance, duration, equity, unfortunate events like unemployment and divorce and affordability measures to identify the main drivers of the probability of loss. Findings – Although the number of losses increases over time, the number of losses relative to the active insurance is still low, despite the fact that the Dutch housing market is the world’s most strongly leveraged housing market. On average, the peak in loss probability lies around a duration of four years. The average loss probability is virtually zero for durations larger than 10 years. Mortgages initiated just prior to the beginning of the financial crisis have an increased loss probability. The most important drivers of the loss probability are home equity, unemployment and divorce. Affordability measures are less important. Research limitations/implications – Mortgage insurance is available for the lower end of the market only and is intended to decrease the impact of risk selection by banks. The analysis is based on aggregate data; no information on individual households, like initial loan-to-value and price-to-income ratios; current home equity; and unfortunate events, like unemployment and divorce, is available. The research uses averages of these variables per calendar year and/or duration. Information on repayments of insured mortgages is missing. Originality/value – This paper is the first to describe the main drivers of losses on insured mortgages in The Netherlands by using loss data covering two housing market crises, one in the early 1980s and the current crisis that started in 2008. Much has changed between the two crises. For instance, prices have risen steeply as has household indebtedness. Furthermore, alternative mortgage products have increased in popularity. Focusing a study on the drivers of mortgage losses exclusively on the current crisis could therefore be biased, given the time-specific circumstances on the housing market.

scholarly journals On households and unemployment insurance

10.3982/qe865 ◽  
2020 ◽  
Vol 11 (1) ◽  
pp. 437-469 ◽  
Author(s):  
Sekyu Choi ◽  
Arnau Valladares-Esteban
Keyword(s):  
Labor Market ◽  
Unemployment Insurance ◽  
Labor Market Transitions ◽  
Us Economy ◽  
The Us ◽  
Married Individuals ◽  
Aggregate Wealth ◽  
Labor Market Shocks ◽  
Market Shocks ◽  
Market Transitions

We study unemployment insurance in a framework where the main source of heterogeneity among agents is the type of household they live in: some agents live alone while others live with their spouses as a family. Our exercise is motivated by the fact that married individuals can rely on spousal income to smooth labor market shocks, while singles cannot. We extend a version of the standard incomplete‐markets model to include two‐agent households and calibrate it to the US economy with special emphasis on matching differences in labor market transitions across gender and marital status as well as aggregate wealth moments. Our central finding is that changes to the current unemployment insurance program are valued differently by married and single households. In particular, a more generous unemployment insurance reduces the welfare of married households significantly more than that of singles and vice versa. We show that this result is driven by the amount of self‐insurance existing in married households, and thus, we highlight the interplay between self‐ and government‐provided insurance and its implication for policy.

scholarly journals Reassessing the Effects of Extending Unemployment Insurance Benefits

2014 ◽  
pp. 1-6
Author(s):  
Pedro Amaral ◽  
Jessica Ice
Keyword(s):  
Unemployment Insurance ◽  
Unemployment Rate ◽  
Great Recession ◽  
Job Creation ◽  
Unemployment Benefits ◽  
Insurance Benefits ◽  
The Great Recession ◽  
High Level ◽  
The Impact ◽  
The Way

To deal with the high level of unemployment during the Great Recession, lawmakers extended the availability of unemployment benefits—all the way to 99 weeks in the states where unemployment was highest. A recent study has found that the extensions served to increase unemployment significantly by putting upward pressure on wages, leading to less jobs creation by firms. We replicate the methodology of this study with an updated and longer sample and find a much smaller impact. We estimate that the impact of extending benefits on unemployment through wages and job creation can, at its highest, account for only one-fourth of the increase in the unemployment rate; an impact that is much lower than other estimates in the literature.

Unemployment in the Great Recession: Did the Housing Market Crisis Prevent the Unemployed from Moving to Take Jobs?

2012 ◽  
Vol 102 (3) ◽  
pp. 520-525 ◽  
Author(s):  
Henry S Farber
Keyword(s):  
Housing Market ◽  
Great Recession ◽  
Home Ownership ◽  
Great Difficulty ◽  
Displaced Workers ◽  
The Great Recession ◽  
Using Data ◽  
The Unemployed ◽  
Reduced Mobility ◽  
New Jobs

The labor market in the Great Recession and its aftermath is characterized by great difficulty in escaping unemployment. I present two empirical analyses of a particular explanation for that difficulty, that the housing market crisis has prevented the unemployed from selling their homes and moving to take new jobs. First, I examine post-job-loss mobility rates by home ownership status using data from the Displaced Workers Survey. Second, I examine mobility rates for unemployed homeowners and renters from the month-to-month CPS match. Neither analysis provides any support for the idea that the housing market crisis has reduced mobility of the unemployed.

scholarly journals Exploration of the Windfall and Market Entrepreneurship During the Great Recession

2019 ◽  
Vol 10 (6) ◽  
pp. 15
Author(s):  
Amaechi N. Nwaokoro ◽  
Lee Washington ◽  
Autumn Griffin
Keyword(s):  
Housing Market ◽  
Great Recession ◽  
Opportunity Cost ◽  
Exploratory Study ◽  
Market Conditions ◽  
Economic Opportunities ◽  
The Great Recession ◽  
Economic Markets ◽  
The Impact

Market innovative entrepreneurs have the desire of exploring declining economic markets to seek for windfall. They seek to profit heavily from adverse market conditions. The Great Recession may have presented some economic disasters, rage, and hardship to many people in the housing market in the 2000s but to the innovative market entrepreneurs, it presented some economic opportunities for experiencing a market windfall. Mostly, the objective of this exploratory study is to highlight the impact of the opportunistic events created by the housing foreclosure fillings, completed foreclosures, and home repossessions on the indexed price of housing that harbors the related opportunity cost. The increased indexed price of the housing driven by the fluctuation of both the quantity demanded and produced of housing seems to have led to the entrepreneurial windfall profit during the recession.

scholarly journals Disparities in Wealth Accumulation and Loss from the Great Recession and Beyond

2014 ◽  
Vol 104 (5) ◽  
pp. 240-244 ◽  
Author(s):  
Signe-Mary McKernan ◽  
Caroline Ratcliffe ◽  
Eugene Steuerle ◽  
Sisi Zhang
Keyword(s):  
Housing Market ◽  
Great Recession ◽  
Wealth Accumulation ◽  
Survey Of Consumer Finances ◽  
The Great Recession ◽  
Consumer Finances ◽  
Family Wealth ◽  
Synthetic Cohort ◽  
Pseudo Panel ◽  
The Impact

Using over two decades of Survey of Consumer Finances data and a pseudo-panel technique, we measure the impact of the Great Recession on US family wealth relative to the counterfactual of what wealth would have been given wealth accumulation trajectories. Our synthetic cohort-level models find that the Great Recession reduced average family wealth by 28.5 percent-nearly double the magnitude of previous pre-post mean descriptive estimates and double the magnitude of any previous recession since the 1980s. The housing market was only part of the story; all major wealth components fell as a result of the Great Recession.

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