Knowledge of Future Job Loss and Implications for Unemployment Insurance

• 成果类型: Article
• 署名作者: Hendren, Nathaniel
• 署名单位: Harvard University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20151655
• 发表日期: 2017
• 页码: 1778-1823
• 关键词: EARNINGS UNCERTAINTY; PRECAUTIONARY WEALTH; private information; measurement error; income shocks; moral hazard; consumption; MARKETS; expectations; liquidity

摘要

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.