Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment

• 成果类型: Article
• 署名作者: Borgschulte, Mark; Martorell, Paco
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; University of California System; University of California Davis
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20160257
• 发表日期: 2018
• 页码: 101-127
• 关键词: labor-market; consumption inequality; job displacement; models; search; RISK; BEHAVIOR; entry; time

摘要

This paper provides revealed preference estimates of the monetary value to workers of a lower unemployment rate at the time of job separation. By examining the decision between reenlisting and exiting the military, we find that service members would sacrifice 1.5-2 percent in earnings to avoid a 1 percentage point increase in the home-state unemployment rate during job search. Comparing these quantities to realized earnings losses for those who separate suggests that the value of nonwork time and other factors (e.g., private and public transfers) offset less than one-third of the earnings losses caused by exiting the military into a weak labor market.