job search requirements for older unemployed transitions to employment early retirement and disability benefits we use a recent policy change in the netherlands to study how changes in search requirements for the older unemployed affect their transition rates to employment early retirement and sickness disability benefits the reform becoming effective on january 1 2004 requires the elderly to formally report their job search efforts to the employment office in order to avoid a temporary cut in benefits before the new law was passed unemployed individuals were allowed to stop all search activity at the moment they turned 57 5 estimating various duration models using difference in difference and regression discontinuity approaches we find that for several groups of individuals who are affected by the policy change the stricter search requirements significantly increases their entry rate into employment however we also find evidence of a higher outflow to sickness disability insurance schemes a presumably unwanted side effect of the policy change

ethnicity neighborhoods and human capital externalities the socioeconomic performance of today s workers depends not only on parental skills but also on the average skills of the ethnic group in the parents generation or ethnic capital this paper investigates the link between the ethnic externality and ethnic neighborhoods the evidence indicates that residential segregation and the external effect of ethnicity are linked partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised ethnicity has an external effect even among persons who grow up in the same neighborhood when children are exposed frequently to persons who share the same ethnic background copyright 1995 by american economic association

assessing the effects of reemployment bonuses on job search a regression discontinuity approach abstract this study examines the impacts of reemployment bonuses that is the incentive payments to unemployment insurance ui recipients who find a job within a specified period using korean data a sharp discontinuity in treatment assignment at age 55 identifies the effect of increased reemployment bonuses on unemployment duration and on subsequent job duration the results indicate that increases in the reemployment bonus boost the job finding hazards of ui claimants early in their unemployment spells during the bonus qualification period and significantly shorten the duration of ui spells by 0 16 to 0 42 months 0 68 to 1 82 weeks in addition employment stability is not significantly affected by an increased bonus which implies no negative influence of the bonus on subsequent job match quality the simulated estimates show that the increase in tax revenue and the decrease in ui benefit payment caused by the behavioral response of ui recipients are large enough to offset the increased cost of the reemployment bonus

the boundaries of loss aversion abstract in this article the authors propose some psychological principles to describe the boundaries of loss aversion a key idea is that exchange goods that are given up as intended do not exhibit loss aversion for example the authors propose that money given up in purchases is not generally subject to loss aversion the results of several experiments provide preliminary support for the hypotheses the authors find that consistent with prospect theory loss aversion provides a complete account of risk aversion for risks with equal probability to win or lose the authors propose boundaries for this result and suggest further tests of the model

unemployment insurance and subsequent job duration job matching versus unobserved heterogeneity the relationship between unemployment insurance ui benefit duration unemployment duration and subsequent job duration is investigated using a multi state duration model with state specific unobserved heterogeneity i examine two potential explanations for the negative correlation between unemployment and job spell durations ui benefits increase job matching quality the matching effect versus unobserved heterogeneity adverse selection the matching effect is found to be weak although new jobs accepted within 5 weeks of benefit termination seem to have a higher dissolution rate the negative correlation between unemployment and job duration is mostly explained by unobserved heterogeneity various simulations indicate that increasing the maximum benefit duration by one week will raise expected unemployment duration by 1 0 to 1 5 days but will raise expected job duration by 0 5 to 0 8 day only copyright 2001 john wiley sons ltd

why do low income households not use food stamps evidence from an experiment this paper explores why many low income households do not participate in the food stamp program by analyzing detailed income and asset data from a sample of low income households we find that many households that appear to be eligible for food stamps in fact are not eligible by conducting an experiment designed to investigate the role of information on participation in the food stamp program we observe that ignorance about the program contributes to nonparticipation however there is evidence that knowledge about the program is endogenous households generally avail themselves of information about the program when the anticipated benefits of doing so are large

a reference price theory of the endowment effect abstract the common finding that selling prices exceed buying prices the so called endowment effect is typically explained by the assumptions that consumers evaluate potential transactions with respect to their current holdings and that the owners of a good regard its potential loss to be more significant than nonowners regard its potential acquisition in contrast to this pain of losing account the authors propose that the endowment effect reflects a reluctance to trade on terms that appear unfavorable with respect to salient reference prices in six experiments and eight more summarized in appendixes the authors show that manipulations that reduce the gap between valuations and reference prices reduce or eliminate the endowment effect these results suggest that the endowment effect is often best construed as an aversion to bad deals rather than an aversion to losing possessions

lessons from the u s unemployment insurance experiments recent social experiments have evaluated two reforms of the unemployment insurance ui system reemployment bonuses and job search programs the bonus experiments show that economic incentives affect the length of ui receipt and provide weak evidence that an earlier return to work does not decrease earnings the experiments do not show the favorability of a permanent bonus program as they ignore its effect on the number of the claimants the job search experiments test several more promising reforms nearly all of the combinations of services and increased enforcement reduce ui receipt and have favorable cost benefit analyses earnings often increase though the estimates are imprecise

urban poverty and juvenile crime evidence from a randomized housing mobility experiment this paper uses data from a randomized housing mobility experiment to study the effects of relocating families from high to low poverty neighborhoods on juvenile crime outcome measures come from juvenile arrest records taken from government administrative data our e ndings seem to suggest that providing families with the opportunity to move to lower poverty neighborhoods reduces violent criminal behavior by teens

the long term effects of job search requirements evidence from the uk jsa reform this paper investigates long term returns from unemployment compensation exploiting variation from the uk jsa reform of 1996 which implied a major increase in job search requirements for eligibility and in the related administrative hurdle search theory predicts that such changes should raise the proportion of non claimant nonemployed with consequences on search effort and labor market attachment and lower the reservation wage of the unemployed with negative effects on post unemployment wages i test these ideas on longitudinal data from social security records llmdb using a difference in differences approach i find that individuals who start an unemployment spell soon after jsa introduction as opposed to six months earlier are 2 5 3 more likely to move from unemployment into incapacity benefits spells and 4 5 less likely to have positive earnings in the following year this latter employment effect only vanishes four years after the initial unemployment shock also annual earnings for the treated individuals are lower than for the non treated these results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits they were not successful in moving them onto long lasting or better jobs with fairly long lasting unintended consequences on a number of labor market outcomes

the general equilibrium impacts of unemployment insurance evidence from a large online job board abstract during the great recession u s unemployment benefits were extended by up to 73 weeks theory predicts that extensions increase unemployment by discouraging job search a partial equilibrium effect using data from the large job board careerbuilder com i find that a 10 increase in benefit duration decreased state level job applications by 1 but had no robust effect on job vacancies job seekers thus faced reduced competition for jobs a general equilibrium effect calibration implies that the general equilibrium effect reduces the impact of unemployment insurance on unemployment by 39

blame the parents how parental unemployment affects labor supply and job quality for young adults we study the role of shocks to parental income in determining the labor market outcomes of children entering the labor market we find that a child whose parent loses a job prior to the child s lab

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

does reducing unemployment insurance generosity reduce job match quality abstract this paper analyzes how a change in slovenia s unemployment insurance law affected the quality of jobs workers found after periods of unemployment taking advantage the natural experiment we show through difference in differences estimation results that reducing the potential duration of unemployment benefits had no detectable effect on wages on the probability of securing a permanent rather than a temporary job or on the duration of the post unemployment job

labor market effects of unemployment insurance design with the emergence of the great recession unemployment insurance ui is once again at the heart of the policy debate in this paper we review the recent theoretical and empirical evidence on the labor market effects of ui design we also discuss policy issues related to ui design including the structure of benefits the role of liquidity constraints and the pros and cons of a ui system in which the generosity of ui benefits is varying over the business cycle finally we identify potential areas of future research

the effect of unemployment benefits and nonemployment durations on wages abstract we estimate that unemployment insurance ui extensions reduce reemployment wages using sharp age discontinuities in ui eligibility in germany we show this effect combines two key policy parameters the effect of ui on reservation wages and the effect of nonemployment durations on wage offers our framework implies if ui extensions do not affect wages conditional on duration then reservation wages do not bind we derive resulting instrumental variable estimates for the effect of nonemployment durations on wage offers and bounds for reservation wage effects the effect of ui on wages we find arises mainly from substantial negative nonemployment duration effects jel j31 j64 j65

an economic model of welfare stigma perhaps the most basic assumption of the economic theory of consumer demand is that more is better than less virtually all of the major propositions of consumer theory can in a certain sense be derived from the assumption that goods are good interestingly however this tenet seems to be violated by the behavior of many individuals in the low income population for many turn out to be eligible for a positive welfare benefit but do not in fact join the welfare rolls for example it has been estimated that in 1970 only about 69 percent of the families eligible for afdc aid to families with dependent children participated in the program see richard michel 1980 the corresponding percentage for afdc u the program for which families with an unemployed male are eligible was only 43 percent and the participation rate in the food stamp program was only 38 percent see maurice mcdonald 1977 this phenomenon has puzzled many investigators because such individuals do not locate on the boundaries of their budget sets consequently most investigators ignore the problem when studying the effects of welfare programs on behavior in this paper this seemingly irrational rejection of an increase in income is modeled as resulting from welfare stigma that is from disutility arising from participation in a welfare program per se 1 the existence of stigma has been amply documented in the sociological literature patrick horan and patricia austin 1974 lee rainwater 1979 where interviews of recipients have often uncovered feelings of lack of self respect and negative self characterizations from participation in welfare nevertheless this phenomenon has not been modeled and many questions consequently remain when is the disutility of participation strong enough to prevent participation shouldn t we expect individuals to weigh the disutility of participation against the potential benefit in their decisions what is the elasticity of participation with respect to the potential benefit also in a slightly different vein how are the work disincentives of welfare affected by stigma these questions have been given scant attention by economists yet they are crucial for our ability to predict the impact of various welfare programs on the lowincome population here these questions are addressed by modeling nonparticipation as a utility maximizing decision the model is developed and estimated for the afdc program 2 the model posits an individual utility function containing not just disposable income but

immigration and the welfare state immigrant participation in means tested entitlement programs this paper documents the extent to which immigrants in the united states over the past 30 years participate in the many programs that make up the welfare state the immigrant native difference in the probability of receiving cash benefits is small but the gap widens once other programs are included in the analysis 21 percent of immigrant households receive some type of assistance as compared with only 14 percent of native households the types of benefits received by earlier immigrants influence the types of benefits received by newly arrived immigrants hence there might be ethnic networks that transmit information about the availability of particular benefits to new immigrants excerpt

hospital ownership and public medical spending the hospital market is served by firms that are private for profit private not for profit and government owned and operated i use a plausibly exogenous change in hospital financing that was intended to improve medical care for the poor to test three theories of organizational behavior i find that the critical difference between the three types of hospitals is caused by the soft budget constraint of government owned institutions the decision makers in private not for profit hospitals are just as responsive to financial incentives and are no more altruistic than their counterparts in profit maximizing facilities my final set of results suggests that the significant increase in public medical spending examined in this paper has not improved health outcomes for the indigent i introduction the hospital market is served by firms that are private for profit private not for profit and publicly owned and operated in this paper i examine how a hospital s type of ownership influences its response to profitable opportunities that are created by changes in government policy the policy change that i exploit was designed to improve the quality of medical care for lowincome individuals by significantly increasing hospitals financial incentives to treat them this program also substantially increased the revenues of those hospitals that had been serving a disproportionate share of the indigent i use this plausibly exogenous change in government policy to test three different theories of organizational behavior and then to assess the impact of hospital behavioral responses on health outcomes the response of organizations to changes in government policy will have an important impact on the consequences of these policies this is likely to be especially true in the medical sector in which the federal state and local governments contract directly

a test of competing explanations of compensation demanded the disparity between willingness to pay and willingness to accept also known as compensation demanded is a robust experimental finding two types of explanations been proposed the first invokes psychological effects broadly categorized as reference dependence and loss aversion the second explanation is that there are large substitution effects but that underlying behavior is neoclassically utility theoretic the key observation motivating the present study is that loss aversion implies concavity of willingness to accept whereas the utility theoretic explanation implies convexity we report experiments in which subjects were endowed with 3 items and asked the minimum payments they required to be willing to relinquish 1 2 or 3 of them we examine whether the compensation demanded is convex concave neither or both in the number of items being relinquished

learning your comparative advantages we introduce an equilibrium labor market model where workers gradually learn about their unobserved production abilities while engaged in a productive activity occupation workers observe their output and extract information that allows them to make inferences about their unobserved aptitudes because workers are learning about themselves their output informs them not only about their productivity in their current occupation but about their likely productivity in other occupations as well as workers acquire more information they self select into the occupations in which they expect to perform best and their wages increase returns to experience here capture improved job selection by workers as they sort through occupations and learn

recent trends in insured and uninsured unemployment is there an explanation this paper explores the recent decline in the fraction of unemployed workers who receive unemployment insurance benefits using march current population surveys we compare the fraction who are potentially eligible for benefits with the fraction who receive them the decline in insured unemployment is almost entirely due to a decline in the early 1980s in the takeup rate for benefits we analyze the determinants of the takeup rate using both aggregated state level data and micro data at least half the decline is due to an increasing share of unemployment in states with lower takeup rates

moral hazard vs liquidity and optimal unemployment insurance this paper presents new evidence on why unemployment insurance ui benefits affect search behavior and develops a simple method of calculating the welfare gains from ui using this evidence i show that 60 percent of the increase in unemployment durations caused by ui benefits is due to a liquidity effect rather than distortions on marginal incentives to search moral hazard by combining two empirical strategies first i find that increases in benefits have much larger effects on durations for liquidity constrained households second lump sum severance payments increase durations substantially among constrained households i derive a formula for the optimal benefit level that depends only on the reduced form liquidity and moral hazard elasticities the formula implies that the optimal ui benefit level exceeds 50 percent of the wage the exact identification approach to welfare analysis proposed here yields robust optimal policy results because it does not require structural estimation of primitives

benefit duration unemployment duration and job match quality a regression discontinuity approach summary we use a sharp discontinuity in the maximum duration of benefit entitlement to identify the effect of extended benefit duration on unemployment duration and post unemployment outcomes employment stability and re employment wages we address dynamic selection which may arise even under an initially random assignment to treatment estimating a bivariate discrete time hazard model jointly with a wage equation and correlated unobservables owing to the non stationarity of job search behavior we find heterogeneous effects of extended benefit duration on the re employment hazard and on job match quality our results suggest that the unemployed who find a job close to and after benefit exhaustion experience less stable employment patterns and receive lower re employment wages compared to their counterparts who receive extended benefits and exit unemployment in the same period these results are found to be significant for men but not for women copyright 2012 john wiley sons ltd

unemployment fears and deflationary spirals the interaction of incomplete markets and sticky nominal wages is shown to magnify business cycles even though these two features in isolation dampen them during recessions fears of unemployment stir up precautionary sentiments which induces agents to save more the additional savings may be used as investments in both a productive asset equity and an unproductive asset money but even a small rise in money demand has important consequences the desire to hold money puts deflationary pressure on the economy which provided that nominal wages are sticky increases wage costs and reduces firm profits lower profits repress the desire to save in equity which increases the fear of unemployment and so on this is a powerful mechanism which causes the model to behave differently from both its complete markets version and a version with incomplete markets but without aggregate uncertainty in contrast to previous results in the literature agents uniformly prefer non trivial levels of unemployment insurance

the adverse effect of unemployment insurance on workers on the job effort and labor market outcomes i investigate the effect of unemployment insurance on worker on the job effort and its macroeconomic impacts the results show that a moderate increase in unemployment benefits decreases the average wage and employment duration and aggregate output and increases average layoff rate

when the going gets tough financial incentives duration of unemployment and job match quality in the aftermath of the great recession the spanish government reduced the replacement rate rr from 60 percent to 50 percent after 180 days of unemployment for all spells beginning on or after july 15 2012 using social security data and a differences in differences approach we find that reducing the rr by ten percentage points or 17 percent increases workers odds of finding a job by 41 percent relative to similar workers not affected by the reform to put it differently the reform reduced the mean expected unemployment duration by 5 7 weeks or 14 percent implying an elasticity of 0 86 a regression discontinuity approach indicates that the reform increased the job finding rate by 26 percent we find strong behavioral effects as the reform reduced the expected unemployment duration right from the beginning of the unemployment spell while the reform had no effect on wages it did not decrease other measures of post displacement job match quality after 15 months the reform decreased unemployment insurance expenditures by 16 percent about one half of which are explained by job seekers behavioral changes

reprint of the general equilibrium impacts of unemployment insurance evidence from a large online job board abstract during the great recession u s unemployment benefits were extended by up to 73 weeks theory predicts that extensions increase unemployment by discouraging job search a partial equilibrium effect using data from the large job board careerbuilder com i find that a 10 increase in benefit duration decreased state level job applications by 1 but had no robust effect on job vacancies job seekers thus faced reduced competition for jobs a general equilibrium effect calibration implies that the general equilibrium effect reduces the impact of unemployment insurance on unemployment by 39

neoclassical theory versus prospect theory evidence from the marketplace several experimental studies have provided evidence that suggest indifference curves have a kink around the current endowment level these results which clearly contradict closely held economic doctrines have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory e g prospect theory which invokes psychological effects this paper pits neoclassical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a well functioning marketplace the pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers but consumers with intense market experience behave largely in accordance with neoclassical predictions moreover the data are consistent with the notion that consumers learn to overcome the endowment effect in situations beyond specific problems they have previously encountered this transference of behavior across domains has important implications in both a positive and normative sense

network effects and welfare cultures we empirically examine the role of social networks in welfare participation using data on language spoken at home to better infer networks within an area our empirical strategy asks whether being surrounded by others who speak the same language increases welfare use more for those from high welfare using language groups this methodology allows us to include local area and language group fixed effects and to control for the direct effect of being surrounded by one s language group these controls eliminate many of the problems in previous studies the results strongly confirm the importance of networks in welfare participation

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

does disability insurance receipt discourage work using examiner assignment to estimate causal effects of ssdi receipt abstract we present the first causal estimates of the effect of social security disability insurance benefit receipt on labor supply using all program applicants we use administrative data to matc

the role of information and social interactions in retirement plan decisions evidence from a randomized experiment this paper analyzes a randomized experiment to shed light on the role of information and social interactions in employees decisions to enroll in a tax deferred account tda retirement plan within a large university the experiment encouraged a random sample of employees in a subset of departments to attend a benee ts information fair organized by the university by promising a monetary reward for attendance the experiment multiplied by more than e ve the attendance rate of these treated individuals relative to controls and tripled that of untreated individuals within departments where some individuals were treated tda enrollment e ve and eleven months after the fair was signie cantly higher in departments where some individuals were treated than in departments where nobody was treated however the effect on tda enrollment is almost as large for individuals in treated departments who did not receive the encouragement as for those who did we provide three interpretations differential treatment effects social network effects and motivational reward effects to account for these results

the effect of giving it all up on valuation a new look at the endowment effect in three experiments we show that the endowment effect the tendency to demand more money for relinquishing owned goods than one is willing to pay for the same goods fails to emerge when sellers are not fully depleted of their endowment this finding is incompatible with prospect theory s account of the effect as stemming primarily from aversion to loss relative to the individual s current state we suggest a new account of the endowment effect as reflecting the human aversion to giving it all up rather than simply an aversion to incurring any loss relative to the status quo experiments 1 and 2 show the effect employing a pricing paradigm experiment 3 examines what constitutes all in the giving it all up effect this paper was accepted by uri gneezy behavioral economics

unemployment insurance in europe unemployment duration and subsequent employment stability the disincentive effect of unemployment insurance on unemployment duration has been the focus of the empirical literature the potential effect of unemployment insurance on post unemployment outcomes which may be regarded as beneficial by improving job matching has attracted much less attention this paper provides evidence on the effect of unemployment benefits on unemployment and employment duration in europe using individual data from the european community household panel for eight countries country specific estimates based on multivariate discrete time duration models controlling for observed and unobserved individual heterogeneity suggest that although receiving benefits has an adverse effect in the sense of increasing unemployment duration there is also a positive effect by increasing subsequent employment duration this beneficial effect of unemployment insurance on employment stability is pronounced in countries with relatively generous benefit systems and for recipients who have remained unemployed for at least six months these findings are in line with theories suggesting a matching effect of unemployment insurance

reprint of the pros and cons of sick pay schemes testing for contagious presenteeism and noncontagious absenteeism behavior abstract this paper provides an analytical framework and uses data from the u s and germany to test for the existence of contagious presenteeism and negative externalities in sick leave insurance the first part exploits high frequency google flu data and the staggered implementation of u s sick pay mandates to show using a reduced form framework that population level influenza like disease rates decrease after employees gain access to paid sick leave next a simple theoretical framework provides evidence on the underlying behavioral labor supply mechanisms the model theoretically decomposes overall labor supply adjustments moral hazard into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions the last part illustrates how to implement the model exploiting a german sick pay reform and administrative industry level data on certified sick leave by diagnosis the empirical test finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases under the identifying assumptions of the model this finding provides additional indirect evidence for the existence of contagious presenteeism

liquidity affects job choice evidence from teach for america can access to a few hundred dollars of liquidity affect the career choice of a recent college graduate in a three year field experiment with teach for america tfa a prestigious teacher placement program we randomly increase the financial packages offered to nearly 7 300 potential teachers who requested support for the transition into teaching the first two years of the experiment reveal that although most applicants do not respond to a marginal 600 of grants or loans those in the worst financial position respond by joining tfa at higher rates we continue the experiment into the third year and self replicate our results for the highest need applicants an extra 600 in loans 600 in grants and 1 200 in grants increase the likelihood of joining tfa by 12 2 11 4 and 17 1 percentage points or 20 0 18 7 and 28 1 respectively additional grant and loan dollars are equally effective suggesting a liquidity mechanism a follow up survey bolsters the liquidity story and also shows that those drawn into teaching would have otherwise worked in private sector firms

the pros and cons of sick pay schemes testing for contagious presenteeism and noncontagious absenteeism behavior abstract this paper provides an analytical framework and uses data from the u s and germany to test for the existence of contagious presenteeism and negative externalities in sick leave insurance the first part exploits high frequency google flu data and the staggered implementation of u s sick pay mandates to show using a reduced form framework that population level influenza like disease rates decrease after employees gain access to paid sick leave next a simple theoretical framework provides evidence on the underlying behavioral labor supply mechanisms the model theoretically decomposes overall labor supply adjustments moral hazard into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions the last part illustrates how to implement the model exploiting a german sick pay reform and administrative industry level data on certified sick leave by diagnosis the empirical test finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases under the identifying assumptions of the model this finding provides additional indirect evidence for the existence of contagious presenteeism

peer effects in welfare dependence quasi experimental evidence this paper examines peer effects in welfare use among refugees we exploit a swedish refugee placement policy which generated exogenous variation in peer group composition our analysis distinguishes between the quantity of contacts the number of individuals of the same ethnicity and the quality of contacts welfare use among members of the ethnic group long term welfare dependence increases if the individual is placed in a welfare dependent community the number of contacts is either irrelevant or negatively related to welfare receipt not controlling for residential self selection yields the opposite conclusion the results are very similar across household types and in different parts of the predicted earnings distribution

ssi for disabled immigrants why do ethnic networks matter immigrants residing among many coethnics are especially likely to receive ssi for a disability when they belong to high ssi take up immigrant groups after showing that this relationship cannot be fully explained by differences in health we consider the likely sources of these network effects by separately examining their role in the decision to apply for ssi and conditional on applying their role in determining who ultimately receives benefits our results suggest that networks may increase the probability of applying for ssi despite minor disabilities but it is unlikely that network effects are driven by egregious lies on applications

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

multiple unit holdings yield attenuated endowment effects previous endowment effect experiments have examined circumstances in which people encounter a single unit of a good e g one chocolate we contrast single unit treatments with multiple unit treatments in which participants encounter several units of a good e g five chocolates we observe endowment effects of typical magnitude for singleton holdings but attenuated endowment effects for multiple unit holdings moreover endowment effects consistently arise for singletons even as the definition of a unit is altered for instance participants holding one piece of chocolate show an endowment effect of standard size but so do participants holding one box of chocolates yet the box contains about 20 individual pieces of chocolate and participants given that many separate pieces show a substantially attenuated endowment effect we thus propose the property of unit dependence the definition of a unit can change but contingent on any given definition a pronounced endowment effect may emerge for singletons but not multiples this paper was accepted by teck ho decision analysis

the match quality gains from unemployment insurance this paper assesses the benefits of unemployment insurance ui by measuring its effect in match quality we note that ui generosity should affect the decision to match or not and should therefore have some effect on match quality using nlsy data we analyze the relationship between postunemployment job tenure and measures of the state level ui generosity and the unemployment rate at the time the job is started we show that greater ui generosity leads to longer job tenure furthermore we find some evidence that this effect is more pronounced during busts ui having a limited dampening effect on the cyclical variation in match quality

immigrant networks and the take up of disability programs evidence from the united states we examine the role of ethnic networks in disability program take up among working age immigrants in the united states controlling for country of origin and area of residence fixed effects immigrants residing amid a large number of co ethnics are more likely to receive disability payments when their ethnic groups have higher take up rates differences in satisfying the work history or income and asset requirements of the disability programs explain part of this relationship but social norms also play an important role information sharing appears influential for supplemental security income take up but not for social security disability income jel j61 h55 i18

estimating a household production function heterogeneity the demand for health inputs and their effects on birth weight the household production literature emphasizes that technical or biological processes condition input selection by households in their production activities along with prices and income exogenous variations in health to the extent that they are perceived by individuals heterogeneity lead to correlations between inputs and health outcomes that cannot be used to derive causal conclusions therefore estimates of health technology must be obtained from a behavioral model in which health inputs are themselves choices consistent estimates are reported of the effect of endogenous inputs such as medical care smoking and fertility on birth weight and fetal growth in the presence of health heterogeneity

how effective are unemployment benefit sanctions looking beyond unemployment exit this paper provides a comprehensive evaluation of benefit sanctions i e temporary reductions in unemployment benefits as punishment for noncompliance with eligibility requirements in addition to the effects on unemployment durations we evaluate the effects on post unemployment employment stability on exits from the labor market and on earnings in our analysis we use a rich set of swiss register data which allow us to distinguish between ex ante effects the effects of warnings and the effects of enforcement of benefit sanctions adopting a multivariate mixed proportional hazard approach to address selectivity we find that both warnings and enforcement increase the job finding rate and the exit rate out of the labor force warnings do not affect subsequent employment stability but do reduce post unemployment earnings actual benefit reductions lower the quality of post unemployment jobs both in terms of job duration as well as in terms of earnings the net effect of a benefit sanction on post unemployment income is negative over a period of two years after leaving unemployment workers who got a benefit sanction imposed face a net income loss equivalent to 30 days of full pay due to the ex post effect in addition to that stricter monitoring may reduce net earnings by up to 4 days of pay for every unemployed worker due to the ex ante effect

networks or neighborhoods correlations in the use of publicly funded maternity care in california abstract this study focuses on network effects in the utilization of publicly funded prenatal care using vital statistics data from california for 1989 2000 networks are defined using 5 digit zip codes and a woman s racial or ethnic group like others we find evidence that the use of public programs is highly correlated within groups defined using race ethnicity and neighborhoods these correlations persist even when we control for many unobserved characteristics by including zip code year fixed effects and when we focus on the interaction between own group behavior and measures of the potential for contacts with other members of the group contact availability however the richness of our data allows us to go further and to conduct several tests of one important hypothesis about networks that the estimated effects represent information sharing within groups the results cast doubt on the idea that the observed correlations can be interpreted as evidence of information sharing in particular we find estimated effects to be as large or larger among women who have previously used the program as among first time users

focusing on the forgone how value can appear so different to buyers and sellers we propose that buying and selling price estimates reflect a focus on what the consumer forgoes in the potential exchange and that this notion offers insight into the well known difference between those two types of value assessment buyers and sellers differ not simply in their valuation of the same item but also in how they assess the value buyers tend to focus on their sentiment toward what they forgo typically the expenditure and buying prices are thus heavily influenced by variables such as salient reference prices by the same token sellers tend to focus on their sentiment toward surrendering the item and selling prices are hence more heavily influenced by variables such as benefits of possessing the item four studies examining buying and selling price estimates of tickets for national collegiate athletic association basketball games offer consistent support for these ideas the studies show that naturally occurring differences among respondents in attitudes relating to the tickets that sellers forgo e g significance of the game corresponded more closely to variation in selling prices than in buying prices conversely measures relating to the expenditure e g respondents concern with money corresponded more closely to buying prices than to selling prices using controlled manipulations we then showed that changes in aspects relating to the game e g expected climate in the stadium affected selling prices more than buying prices but changes relating to the expenditure e g list price of the ticket influenced buying prices more than selling prices we also showed that drawing attention to the benefits of possessing a ticket before asking for the price estimates influenced buying prices more than selling prices supporting our claim that otherwise these benefits are naturally more salient to sellers than buyers similarly drawing attention to alternative uses of money before asking for price estimates influenced selling prices more than buying prices

unemployment compensation and high european unemployment a reassessment with new benefit indicators generous unemployment benefits lie at the heart of the conventional explanation for persistent high unemployment the effects of benefit generosity on work incentives are more ambiguous in a broader behavioural framework in which workers get substantial disutility from unemployment given income and know that unemployment has scarring effects in the future the micro evidence suggests modest effects of changes in generosity but there are reasons to doubt that the impacts on national unemployment rates are consequential the empirical case for the orthodox prediction comes from cross country regressions on the oecd s gross replacement rate grr but the published evidence is mixed and we find little support in the pattern of annual changes in the grr and the unemployment rate for oecd countries over the last three decades we take advantage of new and much improved net replacement indicators from the oecd which show little correlation with either the grrs or with unemployment and employment rates we conclude that the available evidence does not offer compelling support for the conventional view

the stability of household production technology a replication our article develops and estimates a structural model of household health production that jointly determines the demand for leisure and the demand for consumption for elderly males we use a stochastic dynamic programming framework based on the

reference dependent job search evidence from hungary we propose a model of job search with reference dependent preferences with loss aversion relative to recent income the reference point in this model newly unemployed individuals search hard since consumption is below their reference point over time though they get used to lower income and thus reduce their search effort in anticipation of a benefit cut their search effort rises again then declines once they get accustomed to the lower postcut benefit level the model fits the typical pattern of exit from unemployment even with no unobserved heterogeneity to distinguish between this and other models we use a unique reform in the unemployment insurance ui benefit path in 2005 hungary switched from a single step ui system to a two step system with overall generosity unchanged the system generated increased hazard rates in anticipation of and especially following benefit cuts in ways the standard model has a hard time explaining we estimate a model with optimal consumption endogenous search effort and unobserved heterogeneity the reference dependent model fits the hazard rates substantially better than plausible versions of the standard model including habit formation our estimates indicate a slow adjusting reference point and substantial impatience likely reflecting present bias jel codes d03 j64 j65

cash on hand and competing models of intertemporal behavior new evidence from the labor market this paper presents new tests of the permanent income hypothesis and other widely used models of household behavior using data from the labor market we estimate the excess sensitivity of job search behavior to cash on hand using sharp discontinuities in eligibility for severance pay and extended unemployment insurance ui benefits in austria analyzing data for over one half million job losers we obtain three empirical results 1 a lump sum severance payment equal to two months of earnings reduces the job finding rate by 8 12 on average 2 an extension of the potential duration of ui benefits from 20 weeks to 30 weeks similarly lowers job finding rates in the first 20 weeks of search by 5 9 and 3 increases in the duration of search induced by the two programs have little or no effect on subsequent job match quality using a search theoretic model we show that estimates of the relative effect of severance pay and extended benefits can be used to calibrate and test a wide set of intertemporal models our estimates of this ratio are inconsistent with the predictions of a simple permanent income model as well as naive rule of thumb behavior the representative job searcher in our data is 70 of the way between the permanent income benchmark and credit constrained behavior in terms of sensitivity to cash on hand

how shortening the potential duration of unemployment benefits affects the duration of unemployment evidence from a natural experiment in this article we investigate the disincentive effects of shortening the potential duration of unemployment insurance ui benefits we identify these disincentive effects by exploiting changes in slovenia s unemployment insurance system a natural experiment that involved substantial reductions in the potential duration of benefits for four groups of workers plus no change in benefits for another group which served as a natural control we find that the change had a positive effect on the exit rate from unemployment to new jobs and other options for unemployment spells of various lengths and for several categories of unemployed workers

does extending unemployment benefits improve job quality contrary to standard search models predictions past studies have not found a positive effect of unemployment insurance ui on reemployment wages we estimate a positive ui wage effect exploiting