David A. Matsa
Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
NBER Program Affiliations:
NBER Affiliation: Research Associate
NBER Working Papers and Publications
|December 2016||Locked in by Leverage: Job Search during the Housing Crisis|
with Jennifer Brown: w22929
This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search to lower level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding household mobility.
|July 2014||Positive Externalities of Social Insurance: Unemployment Insurance and Consumer Credit|
with Joanne W. Hsu, 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 2012||Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms|
with Jennifer Brown: 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 condition, as measured by companies’ credit default swap prices and accounting data. Analyzing responses to job postings by major financial firms during the Great Recession, 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 a college education.