NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by David A. Matsa

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Working Papers

July 2014Positive Externalities of Social Insurance: Unemployment Insurance and Consumer Credit
with Joanne W. Hsu, David A. Matsa, Brian T. Melzer: w20353
This paper studies the impact of unemployment insurance (UI) on consumer credit markets. Exploiting heterogeneity in UI generosity across U.S. states and over time, we find that UI helps the unemployed avoid defaulting on their mortgage debt. We estimate that UI expansions during the Great Recession prevented about 1.4 million foreclosures. Lenders respond to this decline in default risk by expanding credit access and reducing interest rates for low-income households at risk of being laid off. Our findings call attention to two benefits of unemployment insurance not previously highlighted: reducing deadweight losses from loan default and expanding access to credit.
July 2012Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms
with Jennifer Brown, David A. Matsa: w18208
We use novel data from a leading online job search platform to examine the impact of corporate distress on firms' ability to attract job applicants. Survey responses suggest that job seekers accurately perceive firms' financial health, as measured by the companies' credit default swap prices. Analyzing responses to job postings by major financial firms during the recent financial crisis, we find that an increase in an employer's distress results in fewer and lower quality applicants. These effects are particularly evident when the social safety net provides workers with weak protection against unemployment and for positions requiring advanced training.

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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