Browsing by Subject "Unemployment"
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Item Do “Immigrants Increase the Unemployment of US Citizens?” An Empirical Examination of Trump’s Campaign Rhetoric(2018) Jensen, AnnaI analyze the relationship between immigration and the US economy, specifically, the effects on levels of GDP and unemployment. Employing data that spans the time period 1870 to 2015, and using estimation results from a Vector Error Correction Model (VECM) Granger causality/Block exogeneity Wald test (Enders, 2003), I find a long run equilibrium relationship between GDP, unemployment, and immigration inflows that can be specifically described as a bidirectional causality between GDP and immigration, and a unidirectional causality running from immigration to unemployment. Examination of the response of changes in GDP and unemployment levels to a onetime Cholesky innovations (shocks) in immigration, I observe a rise in GDP and a fall in unemployment level. While these observations are relevant for policy making, especially given the current effort to limit legal immigration to the US, I have yet to validate these observations by accounting for the breakdown of the immigrant population into broad geographic regions of their countries of origins, and skill levels, my conclusions should be considered preliminary.Item Essays in macro and labor economics(2013-06) Wiczer, David GeoffreyThe first chapter studies the rate of long-term unemployment, which spiked during the Great Recession. To help explain this, I exploit the systematic and counter-cyclical differences in unemployment duration across occupations. This heterogeneity extends the tail of the unemployment duration distribution, which is necessary to account for the observed level of long-term unemployment and its increase since 2007. This chapter introduces a model in which unemployment duration and occupation are linked; it measures the effects of occupation-specific shocks and skills on unemployment duration. Here, a worker will be paid more for human capital in his old occupation but a bad shock may make those jobs scarce. Still, their human capital partly ``attaches'' them to their prior occupation, even when searching there implies a longer expected duration. Hence, unemployment duration rises and becomes more dispersed across occupations. Redistributive shocks and business cycles, as in the Great Recession, exacerbate this effect. For quantitative discipline, the model matches data on the wage premium to occupational experience and the co-movement of occupations' productivity. The distribution of duration is then endogenous. For comparison's sake, if a standard model with homogeneous job seekers matches the job finding rate, then it also determines expected duration and understates it. That standard model implies just over half of the long-term unemployment in 1976-2007 and almost no rise in the recent recession. But, with heterogeneity by occupation, this chapter nearly matches long-term unemployment in the period 1976-2007 and 70% of its rise during the Great Recession. The second chapter studies the link between wage growth and the match of a worker's occupation and skills. The notion here is that if human capital accumulation depends on match quality, poor matches can have long-lasting effects on lifetime earnings. I build a model that incorporates such a mechanism, in which human capital accumulation is affected by imperfect information about one's self. This informational friction leads to matches in which a worker accumulates human capital more slowly and has weaker earnings growth. To get direct evidence, the chapter pieces together two sets of data on the skills used by an occupation and the skills a worker is particularly good at. Data on occupations describes occupations by the intensity with which they use many dimensions of workers' knowledge, skills and abilities. To pair, we have data on tests taken by respondents in a panel that tracks occupations and earnings. The test designers created a mapping between their tests and the occupational descriptors, which allows us to create two measures. The first measure of match quality is just the dot product between the dimensions of workers' skills and utilization rate of these skills by occupations. The second measure mismatch relative to an optimal matching computed using the Gale-Shapley algorithm for stable pairs. In both, worse matches have significantly slower returns to occupational tenure. With the most conservative estimate, plus or minus one standard deviation of mismatch affects the return to occupational tenure by 1% per year.Item Essays in macroeconomic labor markets.(2012-08) Michaud, Amanda MarieIn this thesis I study labor market dynamics in a macroeconomic context. The first chapter infers a theory of employment using the differences in wage and employment outcomes of job changers. This theory is used to understand differences in levels of unemployment and predict the effect of policy prohibiting employment discrimination against the unemployed. The second chapter examines the evolution of employment volatility relative to output in the US over the past half century. I find the increase is driven by certain demographic subgroups that can be thought of as highly skilled. I use this variation to see if a theory of increased skill transferability can account for the overall macro increase in relative employment volatility. The final chapter, joint with Jacek Rothert, proposes a link between government housing policy and savings in China. We construct a model of learning by doing in exports and find that optimal government policy restricting residential construction raises employment and output in the tradeable sector. This produces both a current account surplus and can be rationalized as benevolent because of the growth externality in learning by doing.Item Essays on Government Transfers and Labor Markets(2019-04) Birinci, SerdarThis dissertation consists of three chapters. In the first chapter, I document a small spousal earnings response to the job displacement of the family head. The response is even smaller in recessions when earnings losses are larger and additional insurance is most valuable. I investigate whether the small response is an outcome of crowding-out effects of existing government transfers. To accomplish this, I use an incomplete asset markets model with family labor supply and aggregate fluctuations whose predicted spousal labor supply elasticities with respect to transfers are in line with microeconomic estimates both in aggregate and across subpopulations. In this model, counterfactual experiments indeed show that generous transfers in recessions discourage spousal labor supply significantly after the head's job displacement. Then, I solve for optimal means-tested transfers paid to poor families and employment-tested transfers paid to the unemployed. Unlike the current policy that maintains generous transfers of both types in recessions, I find that the optimal policy features procyclical means-tested and countercyclical employment-tested transfers. The second chapter (joint with Kurt See) studies the optimal design of unemployment insurance (UI) over the business cycle, paying particular attention to the effects of generous UI payments on firm vacancy creation. While UI provides insurance to jobless individuals, generous UI payment results in higher reservation wages, a corresponding reduction in firm vacancy creation, both of which lead to a decline in the job finding rate. Using a heterogeneous agent job search model, designed to consider the effects of UI on labor demand, we find that optimal UI policy should be countercyclical. Finally, the third chapter (joint with Anmol Bhandari, Ellen McGrattan, and Kurt Gerrard See) examines the reliability of widely used surveys on U.S. businesses. We compare survey responses of business owners with administrative data and document large inconsistencies in business incomes, receipts, and the number of owners. We document problems due to nonrepresentative samples and measurement errors. Nonrepresentativeness is refected in undersampling of owners with low incomes. Measurement errors arise because respondents do not refer to relevant documents and possibly because of framing issues. We conclude that predictions based on current survey data should be treated with caution.Item Essays on the macroeconomics of labor markets(2014-08) Duras, JanThis thesis is composed of three chapters that study the behavior of economies where trade in both labor and goods market is subject to search frictions. It analyzes the interactions between frictional labor and goods markets and examines technology and preference shocks as alternative sources of business cycle fluctuations in unemployment, hours worked and inventories. In Chapter 1, the focus is on the Diamond-Mortensen-Pissarides model with Nash wage bargaining. This model provides a qualitatively appealing theory of unemployment, but its ability to explain the observed magnitude of fluctuations in unemployment remains debated. I add goods market frictions to this model, and show that they affect workers' bargaining position, provide a rationale for a high value of non-market activity and also affect its cyclical properties. These frictions can thus amplify the response of unemployment and vacancies to changes in the measured labor productivity caused by either technology or preference shocks. The response of the vacancy-unemployment ratio in the extended model is about twice as large as in the model with labor search only if either (1) goods and search effort are substitutes in the goods market matching function and fluctuations are a result of a technology shocks, or (2) when goods and search effort are complements in the goods market matching function and the driving force of fluctuations are preference shocks. Finally, I show that if preferences are additively separable and goods market matching function has unit elasticity of substitution, preference and technology shocks are observationally equivalent and can not be separately identified by an economist who would analyze data on labor productivity, output, employment and wages.Chapter 2 shows that introducing goods market frictions into an otherwise standard model provides a simple but attractive framework to analyze the behavior of inventories over the business cycle. It also shows that the behavior of sales and inventories over the business cycle contains information that allows to identify the contribution of technology and preference shocks to fluctuations in unemployment. I employ Bayesian methods to estimate a model with goods and labor search frictions using U.S. data on labor productivity and inventory-sales ratio, and find that the implied response of vacancies and unemployment to changes in measured labor productivity is about twice as large as in the model with labor search only. Goods market frictions also allow the model to account for the main facts on inventories - procyclical inventory investment, countercyclical inventories-sales ratio, and sales which are more volatile than production.In Chapter 3, I examine another shortcoming of the labor search model identified by Shimer (2010) and related to the so called labor wedge - the gap between the firm's marginal product of labor and the household's marginal rate of substitution between consumption and leisure. I show that under the business cycle accounting approach proposed by Chari, Kehoe, and McGrattan (2007) goods market frictions in the model manifest themselves as a labor wedge: In an expansion, firms find it easier to sell goods, and consumers benefit from higher availability of goods and smaller disutility from search effort required per unit of consumption purchased; this encourages larger response of the intensive margin of labor supply than in the standard frictionless model. It thus also alleviates the issue arising in model with frictional labor markets, where search frictions act as adjustment costs, and thus result in a labor wedge that resembles a counterfactually procyclical tax on labor income.Item Time in the “Great Recession”: the impact of the Great recession and being unemployed on time spent in healthy behaviors and with family members.(2012-08) Hill, Rachelle F.The "Great Recession" gripped the global economy beginning in December of 2007 and though the National Bureau of Economic Research (2010) determined that it concluded in June of 2009, for many people across the United States it has not yet receded as of July of 2012. In this study, I examine the impacts of both the overall employment insecurity accompanying the Great Recession and actual job loss on daily time use. Specifically, I examine the effects of being unemployed, living in states with poor economic conditions, and being interviewed during the Great Recession on 1) time spent with family members, 2) time spent sleeping, and 3) time spent engaging in healthy behaviors in order to gain a greater understanding of the effects of employment uncertainty on the lives of US Population. Drawing on the American Time Use Survey (ATUS), I use multivariate statistical models to examine differences in time spent sleeping, in healthy behaviors, and with family members for a subsample of respondents in the United States between the ages of 23 and 55. I find that employment uncertainty is related to poor sleep outcomes while also being related to greater time spent in healthy behaviors and time with family members. Respondents who are unemployed sleep longer and are more likely to report sleeplessness than the employed; living in states with poor economic conditions (i.e. higher unemployment rates) is related to lower odds of having a sleepless episode but increases the odds of a sleep disruption; and those interviewed during the recession are more likely to sleep more than 9 hours, report sleeplessness, and less likely to report a sleep disruption, compared to respondents who were interviewed before the recession began. Being unemployed is related to exercise, active travel, health-related self-care, and eating breakfast, whereas state economic conditions and historical time period are not as consistently related to healthy behaviors. Poor state economic conditions were related to increased likelihood of spending time in health-related self-care, while being interviewed during the years marked by the recession was related to spending more time in active travel and increased odds of eating breakfast. In regards to family time, being unemployed and living in a state with worse economic conditions (as captured by higher unemployment rates) are related to greater odds of spending time with family members as well as more time spent on average while the recession is related to more time spent with immediate family and less time with extended family members. Though being unemployed, living in states with poor economic conditions, and being interviewed during the Great Recession do not moderate one another in each instance, I find that being unemployed is moderated by other indicators of employment insecurity. In the sleeplessness models becoming unemployed in the 2 to 5 months prior to participating in the ATUS and being interviewed during the recessionary years of 2008 and 2009 were related to lower probabilities of reporting sleeplessness than the employed before the recession. In addition, the declining probability of reporting sleeplessness with increasing state unemployment rates had a smaller slope in 2009 than before the recession. In the health models the long-term unemployed in states with high unemployment tend to spend more time in active travel than the long-term unemployed in low unemployment states and the recently unemployed interviewed during the recessionary years have greater probability of eating breakfast than the employed interviewed before the recession. In contrast, the recently unemployed spend less time in active travel in high unemployment states compared to low unemployment states. In the family models I find that unemployed parents spend more time with children under 6 when they are living in states with high unemployment rates and are interviewed during the recessionary years. The recently unemployed spend less time with extended family members if they are interviewed during the recession while the longer-term unemployed spend more time with their parents if they were interviewed during this same period. In addition, socio-demographic characteristics - particularly gender - are important moderators of how employment insecurity is related to time sleeping, in healthy behaviors, and with family members. Unemployed men experienced more sleeplessness as did men living in states with higher unemployment rates. Unemployed men during the recession spent more time in active travel but spent less time in active travel when living in states with high unemployment rates. Men were less likely to eat breakfast when unemployed and spent less time in health-related self care when living in states with high unemployment rates. Unemployed women spend more time with children and extended family members. Life stage also moderates the relationship between the employment uncertainty and sleep outcomes and healthy behaviors. In particular, older respondents without children and parents spend more time in sleeplessness when living in states with higher state unemployment rates than do the younger respondents without children. Parents of children under 18 also spend less time in exercise and are less likely to eat breakfast during the recession. The employment status of spouses/partners moderates the relationships between employment uncertainty and healthy behaviors and time with family members. Those with employed spouses or partners spend more time in active travel in higher unemployment rate states, while those with spouses or partners who are not employed spend less time in active travel. The long-term unemployed with an employed spouse or partner spend more time with children under 6 and their own parents. Lastly, education moderates the relationships between employment uncertainty and time with family members. During the recession, those with lower levels of education spend more time with parents. In addition, the long-term unemployed with lower levels of education spend more time with extended family members.Item "Worth the Wait?" Measuring the Impact of Extending Unemployment Benefits on Unemployment Duration during the Great Recession(Hubert H. Humphrey School of Public Affairs, 2014-04-14) Hevern, AlexDuring the Great Recession, millions of Americans found themselves out of work. The federal government’s response to the large increase in unemployment was to extend the number of weeks of unemployment insurance an individual may collect while unemployed. It was during this time that the nation also saw a dramatic rise in average unemployment duration to record levels. This paper seeks to determine whether the federal benefit increase was a contributing factor to the sharp rise in unemployment duration. The analysis found that extending unemployment benefits increased unemployment duration spells. When examining all duration spells, each additional week of unemployment benefits resulted in a 0.08 week increase in unemployment duration. There was evidence of a larger impact on the long-term unemployed. For every additional week of unemployment benefits, unemployment duration increased by 0.16 weeks for those individuals who had been unemployed at least 26 weeks.