NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Knowledge of Future Job Loss and Implications for Unemployment Insurance

Nathaniel Hendren

NBER Working Paper No. 21819
Issued in December 2015, Revised in July 2016
NBER Program(s):Aging, Health Care, Health Economics, Industrial Organization, Labor Studies, Public Economics

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 my 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.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Supplementary materials for this paper:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21819

Published: Nathaniel Hendren, 2017. "Knowledge of Future Job Loss and Implications for Unemployment Insurance," American Economic Review, vol 107(7), pages 1778-1823.

Users who downloaded this paper also downloaded* these:
Leeper w21822 Fiscal Analysis is Darned Hard
Luttmer and Samwick w21818 The Welfare Cost of Perceived Policy Uncertainty: Evidence from Social Security
Alesina and Passalacqua w21821 The Political Economy of Government Debt
Engen and Gruber w5252 Unemployment Insurance and Precautionary Saving
Hendren w20351 Efficient Welfare Weights
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us