Department of Economics
50 Memorial Drive
Cambridge, MA 02142
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Massachusetts Institute of Technology
NBER Working Papers and Publications
|January 2019||Marginal Jobs and Job Surplus: A Test of the Efficiency of Separations|
with Benjamin Schoefer, Josef Zweimüller: w25492
We present a sharp test for the efficiency of job separations. First, we document a dramatic increase in the separation rate – 11.2ppt (28%) over five years – in response to a quasi-experimental extension of UI benefit duration for older workers. Second, after the abolition of the policy, the “job survivors” in the formerly treated group exhibit exactly the same separation behavior as the control group. Juxtaposed, these facts reject the “Coasean” prediction of efficient separations, whereby the UI extensions should have extracted marginal (low-surplus) jobs and thereby rendered the remaining (high-surplus) jobs more resilient after its abolition. Third, we show that a formal model of predicted efficient separations implies a piece-wise linear function of the actual control group separatio...
|November 2018||Wages and the Value of Nonemployment|
with Benjamin Schoefer, Samuel G. Young, Josef Zweimüller: w25230
Nonemployment is often posited as a worker's outside option in wage setting models such as bargaining and wage posting. The value of this state is therefore a fundamental determinant of wages and, in turn, labor supply and job creation. We measure the effect of changes in the value of nonemployment on wages in existing jobs and among job switchers. Our quasi-experimental variation in nonemployment values arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit levels: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than 0.03. In contrast, a calibrated Nash bargaining model predicts a sensitivity of 0.39 – more than ten times lar...