scholarly journals Knowledge of Future Job Loss and Implications for Unemployment Insurance

2017 ◽  
Vol 107 (7) ◽  
pp. 1778-1823 ◽  
Author(s):  
Nathaniel Hendren
Keyword(s):  
Willingness To Pay ◽  
Labor Supply ◽  
Unemployment Insurance ◽  
Private Information ◽  
Job Loss ◽  
Spousal Labor ◽  
Market Learning

This paper studies the implications of individuals’ knowledge of future job loss for the existence of an unemployment insurance (UI) market. Learning about job loss leads to consumption decreases and spousal labor supply increases. This suggests existing willingness to pay estimates for UI understate its value. But it yields new estimation methodologies that account for and exploit responses to learning about future job loss. Although the new willingness to pay estimates exceed previous estimates, I estimate much larger frictions imposed by private information. This suggests privately traded UI policies would be too adversely selected to be profitable, at any price. (JEL D82, D83, G22, J22, J64, J65)

Does Unemployment Insurance Crowd out Spousal Labor Supply?

2000 ◽  
Vol 18 (3) ◽  
pp. 546-572 ◽  
Author(s):  
Julie Berry Cullen ◽  
Jonathan Gruber
Keyword(s):  
Labor Supply ◽  
Unemployment Insurance ◽  
Crowd Out ◽  
Spousal Labor

scholarly journals Disability Benefits, Consumption Insurance, and Household Labor Supply

2019 ◽  
Vol 109 (7) ◽  
pp. 2613-2654 ◽  
Author(s):  
David Autor ◽  
Andreas Kostøl ◽  
Magne Mogstad ◽  
Bradley Setzler
Keyword(s):  
Willingness To Pay ◽  
Labor Supply ◽  
Instrumental Variables ◽  
Revealed Preferences ◽  
Net Income ◽  
Family Labor ◽  
Consumption Insurance ◽  
Welfare Implications ◽  
Spousal Labor ◽  
Instrumental Variables Approach

There is no evaluation of the consequences of Disability Insurance (DI) receipt that captures the effects on households’ net income and consumption expenditure, family labor supply, or benefits from other programs. Combining detailed register data from Norway with an instrumental variables approach based on random assignment to appellant judges, we comprehensively assess how DI receipt affects these understudied outcomes. To consider the welfare implications of the findings from this instrumental variables approach, we estimate a dynamic model of household behavior that translates employment, reapplication, and savings decisions into revealed preferences for leisure and consumption. The model-based results suggest that on average, the willingness to pay for DI receipt is positive and sizable. Because spousal labor supply strongly buffers the household income and consumption effects of DI allowances, the estimated willingness to pay for DI receipt is smaller for married than single applicants. (JEL D12, D14, H55, I38, J14, J22)

Family Labor Supply Responses to Severe Health Shocks: Evidence from Danish Administrative Records

2021 ◽  
Vol 13 (3) ◽  
pp. 1-30
Author(s):  
Itzik Fadlon ◽  
Torben Heien Nielsen
Keyword(s):  
Labor Supply ◽  
Insurance Coverage ◽  
Driving Mechanism ◽  
Health Shocks ◽  
Family Labor ◽  
Administrative Records ◽  
The Family ◽  
Short Run ◽  
Spousal Labor ◽  
New Evidence

We provide new evidence on households’ labor supply responses to fatal and severe nonfatal health shocks in the short run and medium run. To identify causal effects, we leverage administrative data on Danish families and construct counterfactuals using households that experience the same event a few years apart. Fatal events lead to considerable increases in surviving spouses’ labor supply, which the evidence suggests is driven by families who experience significant income losses. Nonfatal shocks have no meaningful effects on spousal labor supply, consistent with their adequate insurance coverage. The results support self-insurance as a driving mechanism for the family labor supply responses. (JEL D12, D15, G22, I12, J22)

scholarly journals Sellouts, Beliefs, and Bandwagon Behavior

2018 ◽  
Vol 19 (1) ◽  
Author(s):  
Nick Vikander
Keyword(s):  
Willingness To Pay ◽  
Private Information ◽  
Aggregate Demand ◽  
Consumer Surplus ◽  
Strategic Reasoning ◽  
Dynamic Setting ◽  
Cursed Equilibrium ◽  
Limited Reasoning

AbstractThis paper examines how a firm can strategically use sellouts to influence consumers’ beliefs about its product’s popularity. A monopolist faces a market of conformist consumers, whose willingness to pay is increasing in their beliefs about aggregate demand. Consumers are broadly rational but have limited strategic reasoning about the firm’s incentives. Formally, I apply the concept of a ‘cursed equilibrium’, where consumers neglect how the firm’s chosen actions might be correlated with its private information about demand. I show that in a dynamic setting, the firm may choose its price and capacity so as to generate sellouts, specifically to exploit consumers’ limited reasoning. It does so to effectively conceal unfavorable information from consumers about past demand in a way that increases future profits. Sellouts tend to occur when demand is low, rather than high, and may be accompanied by introductory pricing. The analysis also demonstrates that the firm’s ability to mislead some consumers always benefits certain others, and can result in higher overall consumer surplus.

Unemployment information and wives’ labor supply responses to husbands’ job loss in Taiwan

2012 ◽  
Vol 23 (4) ◽  
pp. 1176-1194 ◽  
Author(s):  
Fung-Mey Huang ◽  
Yir-Hueih Luh ◽  
Fung-Yea Huang
Keyword(s):  
Labor Supply ◽  
Job Loss

A Context-Robust Measure of the Disincentive Cost of Unemployment Insurance

2017 ◽  
Vol 107 (5) ◽  
pp. 343-348 ◽  
Author(s):  
Johannes F. Schmieder ◽  
Till von Wachter
Keyword(s):  
Labor Market ◽  
Labor Supply ◽  
Unemployment Insurance ◽  
Employment Effects ◽  
Different Types

This paper proposes a new measure of the disincentive cost of unemployment insurance (UI): the ratio of the behavioral cost (BC) to the mechanical cost (MC) of a UI reform. This measure represents the labor supply distortion relative to the additional (mechanical) transfer from the UI reform. We show the BC/MC ratio naturally arises from a model of optimal UI and can be readily computed and compared across different types of reforms and labor market contexts. We summarize the evidence regarding the BC/MC ratio for existing studies and relate it to typical measures of employment effects of UI.

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