Unemployment Benefits and Unemployment in the Great Recession: The Role of Macro Effects

Abstract

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Just the Facts: Demographic and Cross-Country Dimensions of the Employment Slump

“…Hall (2014) similarly discusses sustained expansions in food stamp spending and disability receipt. Hagedorn et al (2013) argue for a substantial role for extended unemployment insurance benefits, while Rothstein (2011) andFarber andValletta (2013) argue the opposite. Also potentially relevant, in particular for the employment of young adults, were this period's substantial minimum wage increases.…”

Regional Consumption Responses and the Aggregate Fiscal Multiplier

“…These include work on the regional effects of house prices shocks on consumer spending (Mian, Sufi, and Rao, 2013) and the effect of unemployment insurance across regions (Hagedorn, Karahan, Manovskii, and Mitman, 2016).…”

On the Distribution of the Welfare Losses of Large Recessions

“…20 In our benchmark model instead, dispersion in wealth is driven by uninsurable (because of incomplete markets) idiosyncratic unemployment and income shocks and preference heterogeneity, as already proposed by Krusell and Smith (1998), and further analysed by Hendricks (2007) and Carroll et al (2015). These features interact with a rudimentary life cycle structure and a publicly provided unemployment insurance system.…”

“…Thus, the welfare losses arising from aggregate factor price movements for wealthy households are more substantial (and the U-shaped nature of the aggregate component more severe) in the economy in which UI benefits run out by surprise. 36 See, for example, Hagedorn et. al.…”