Essays on Unemployment and Labor Supply.

摘要

Contrary to the predictions of standard reservation-wage search models, empirical studies consistently find that an extension of UI increases unemployment duration textit{without} improving subsequent wages. Chapter 1 addresses this puzzle in two steps. First, using administrative data from Austria and an age-based regression discontinuity design, we show that an extension of UI eligibility by nine weeks increases the average reemployment wage by a statistically significant 0.5%. We find that the UI effect on both unemployment durations and reemployment wages is larger for individuals with a high ex-ante likelihood of benefit exhaustion and for those laid off during local industry-specific downturns. Second, we show both theoretically and empirically that the UI effect on expected wage is determined by two offsetting forces: (i) agents on UI increase their reservation wages, which raises subsequent wages, but (ii) they also stay unemployed longer and thus experience a greater decrease in job opportunities, which reduces subsequent wages. Together, these results show that UI does have an economically significant impact on job quality consistent with theoretical predictions.;Chapter 2 offers a dynamic view of unemployment to study the separation of workers from firms as well as their hiring. In my framework, layoffs stem from temporary wage rigidity and non-contactable productivity shocks. I show that the optimum allocation is realized when employers internalize not only the direct cost of layoff, i.e. expected UI benefits, but also two additional costs: (i) the uninsured cost of layoff (ii) the increase in unemployment rate due to lower effort from workers.;Are an immigrant's decisions affected in real time by her home country's economy? Chapter 3 examines this question by exploiting exchange rate variations as exogenous price shocks to immigrants' budget constraints. I find that in response to a