UI Generosity and Job Acceptance: Effects of the 2020 CARES Act

To provide relief to the U.S. labor market following the onset of the COVID-19 pandemic, the CARES Act granted an extra $600 per week in UI benefit payments from late March through July 2020. This unprecedented increase in UI generosity raised concern that UI recipients would be largely unwilling to accept job offers, slowing the labor market recovery. Job acceptance decisions weigh the value of a job against remaining unemployed. A reservation level of benefit payments exists in this dynamic decision problem at which an individual is indifferent between accepting and refusing an offer. This reservation benefit is a simple statistic summarizing the decision problem conditional on the perceived state of the labor market and the weeks of Unemployment Insurance (UI) compensation remaining. Estimating the reservation benefit for a wide range of US workers suggests few would turn down an offer to return to work at the previous wage under the CARES Act expanded UI payments. Direct empirical analysis of labor force transitions using matched Current Population Survey (CPS) data, linked to annual earning records from the CPS income supplement to form UI replacement rates, shows moderate disincentive effects of $600 supplemental payments on job finding rates; this empirical framework also suggests small effects of the $300 weekly UI supplement available during 2021.

Mechanisms for hiring discrimination of immigrant applicants in the United States

PurposeFew studies examine how hiring discrimination can be an antecedent to the labor exploitation of immigrant workers. The main purpose of this paper is to advance the theoretical understanding of how the intersectionality of race and immigrant status affects differential hiring treatment, and how it affects job offers, job acceptance and hiring decision outcomes for immigrant job seekers.Design/methodology/approachThe paper draws from theories on status and intersectionality, and literature on immigration labor and racial hierarchy, addressing the unequal power relations that underlie race and immigration status affecting the hiring process, to advance critical understandings of why immigrant job seekers accept positions where they may be exploited.FindingsThis paper provides a conceptual model to critically synthesize the complexity between race and immigrant status, and their effect on the experience of immigrant job seekers differently. Exploitation opportunism is introduced to better understand the mechanisms of hiring discrimination among immigrant job seekers to include the role of race, immigrant status, economic motivations and unequal power relations on the hiring process.Practical implicationsThe framework for exploitation opportunism will help employers improve the quality and fairness of their hiring methods, and empower immigrant job seekers to not allow themselves to accept subpar job offers which can lead to exploitation.Originality/valueThe paper provides an original analysis of immigrant job seekers' experience of the hiring process that reveals the intragroup differences among immigrants based on race and status, and the decision-making mechanisms that hiring managers and immigrant job seekers use to evaluate job offers and job acceptance.

A Contribution to the Empirics of Reservation Wages

This paper provides evidence on the behavior of reservation wages over the spell of unemployment, using high-frequency longitudinal data on unemployed workers in New Jersey. In comparison to a calibrated job search model, the reservation wage starts out too high and declines too slowly, on average, suggesting that many workers persistently misjudge their prospects or anchor their reservation wage on their previous wage. The longitudinal nature of the data also allows for testing the relationship between job acceptance and the reservation wage, where the reservation wage is measured from a previous interview to avoid bias due to cognitive dissonance. (JEL J22, J31, J64)