"The Impact of Unemployment Benefit Extensions on Employment: The 2014 Employment Miracle" past times Marcus Hagedorn , Iourii Manovskii in addition to Kurt Mitman is making waves. NBER working newspaper here. Kurt Mitman's webpage has an ungated version of the newspaper , in addition to a summary of some of the controversy. It's locomote of a duet , amongst "Unemployment Benefits in addition to Unemployment inwards the Great
Recession: The Role of Macro Effects" also including Fatih Karahan.
H5N1 My transportation service here , WSJ coverage , in addition to I mean value at that spot are some papers which google isn't finding fast plenty at the moment.
The basic issue: I mean value it's widely accepted , if sometimes grudgingly , that unemployment insurance increases unemployment. If you lot pay for anything , you lot larn to a greater extent than of it. People amongst unemployment insurance tin agree out for ameliorate jobs , set off moving or other painful adjustments , in addition to thus on. The before newspaper points out that at that spot are of import full general equilibrium effects every bit well. We should utter nearly how UI affects labor markets , non merely project search.
Quick disclaimer. Let's non boundary to "good" in addition to "bad." Searching besides difficult in addition to taking awful jobs inwards the middle of a depression powerfulness non last optimal. Pareto-optimal remove a opportunity sharing amongst moral risk looks a lot similar unemployment insurance. Perhaps that disclaimer tin settle downwardly the musical note of the debate.
But the inquiry remains. How much? How much does unemployment insurance increment unemployment? And the related macro inquiry , merely why did unemployment inwards the the U.S. of A. all of a abrupt drib coincident amongst sequester in addition to the terminate of 99 calendar week unemployment benefits?
Method is important. Too much media coverage starts in addition to stops amongst "study finds unemployment insurance raises unemployment." And in addition to thus the following twenty-four sixty minutes menses "study finds unemployment insurance crucial to stopping people from dying inwards gutters." If nosotros focused on the facts , we'd all larn along better.
In macro , nosotros ever are faced amongst the job that interpreting fourth dimension serial , nosotros never know what else changed. Sure , congress lowered unemployment benefits in addition to the economic scheme took off. But lots of other materials happened. Maybe it's "despite" non "because."
This newspaper is locomote of a novel breed trying to larn around this job past times looking at cross-sectional evidence. Roughly , the prove inwards this newspaper builds on the fact that Congress' activity had unlike effects inwards unlike states.
Bob Hall described the strategy compactly:
If commenters tin vocalize the actual fact inwards words , fixed effects , controls in addition to all , I'd last grateful.
Bob Hall echoes measure but of import complaints.
The deeper number inwards evaluating this newspaper , I mean value , comes from blowing the county results upwards to the aggregate , every bit Bob but it
Recession: The Role of Macro Effects" also including Fatih Karahan.
H5N1 My transportation service here , WSJ coverage , in addition to I mean value at that spot are some papers which google isn't finding fast plenty at the moment.
The basic issue: I mean value it's widely accepted , if sometimes grudgingly , that unemployment insurance increases unemployment. If you lot pay for anything , you lot larn to a greater extent than of it. People amongst unemployment insurance tin agree out for ameliorate jobs , set off moving or other painful adjustments , in addition to thus on. The before newspaper points out that at that spot are of import full general equilibrium effects every bit well. We should utter nearly how UI affects labor markets , non merely project search.
Quick disclaimer. Let's non boundary to "good" in addition to "bad." Searching besides difficult in addition to taking awful jobs inwards the middle of a depression powerfulness non last optimal. Pareto-optimal remove a opportunity sharing amongst moral risk looks a lot similar unemployment insurance. Perhaps that disclaimer tin settle downwardly the musical note of the debate.
But the inquiry remains. How much? How much does unemployment insurance increment unemployment? And the related macro inquiry , merely why did unemployment inwards the the U.S. of A. all of a abrupt drib coincident amongst sequester in addition to the terminate of 99 calendar week unemployment benefits?
Method is important. Too much media coverage starts in addition to stops amongst "study finds unemployment insurance raises unemployment." And in addition to thus the following twenty-four sixty minutes menses "study finds unemployment insurance crucial to stopping people from dying inwards gutters." If nosotros focused on the facts , we'd all larn along better.
In macro , nosotros ever are faced amongst the job that interpreting fourth dimension serial , nosotros never know what else changed. Sure , congress lowered unemployment benefits in addition to the economic scheme took off. But lots of other materials happened. Maybe it's "despite" non "because."
This newspaper is locomote of a novel breed trying to larn around this job past times looking at cross-sectional evidence. Roughly , the prove inwards this newspaper builds on the fact that Congress' activity had unlike effects inwards unlike states.
Bob Hall described the strategy compactly:
They compare labor markets amongst arguably similar weather condition apart from the UI benefits regime. In their piece of work , the markets are defined every bit counties in addition to the similarity arises because they focus on pairs of side past times side counties. The divergence inwards the UI regimes arises because the 2 counties are inwards unlike states in addition to UI benefits are laid at the state grade in addition to ofttimes differ across state boundaries. The inquiry uses a regression-discontinuity blueprint , where the discontinuity is the state boundary in addition to the window is the surface area of the 2 side past times side counties....Table three contains the basic number , which the authors digest as
We notice that a 1% drib inwards produce goodness duration leads to a statistically pregnant increment of job past times 0.0161 log points. In levels , 1.8 1000000 additional jobs were created inwards 2014 due to the produce goodness cut.(Small complaint: economists should non write that jobs "were created ," particularly economists writing inwards the search , jibe in addition to labor-supply tradition , to say nix of passive vocalization in addition to potent causal inferences.) I tried to digest the fact a fighting to a greater extent than , but stopped here:
Column (1) of Table three contains the results of the estimation of the resultant of unemployment produce goodness duration on job using the baseline specification inwards Equation (6).
If commenters tin vocalize the actual fact inwards words , fixed effects , controls in addition to all , I'd last grateful.
Bob Hall echoes measure but of import complaints.
The issues that arise inwards evaluating the newspaper are those for whatever regression-discontinuity inquiry design: (1) Are at that spot whatever other sources of discontinuous changes at the designated discontinuity points that powerfulness last correlated amongst the i of interest? (2) Is the window modest plenty to avoid contamination from differences that produce non occur at the discontinuity signal but rather elsewhere inwards the window?In words , is at that spot something else nearly state policies that changed at the same fourth dimension inwards the "generous" vs. "stingy" states? And are counties genuinely modest plenty to capture exclusively the edge effects?
The deeper number inwards evaluating this newspaper , I mean value , comes from blowing the county results upwards to the aggregate , every bit Bob but it
The authors conclude that , absent the increment inwards UI benefits , unemployment inwards 2010 would remove maintain been nearly three percent points lower.
The boundary dorsum from micro to macro isn't thus slowly either. For illustration , suppose the expansion came from selling to a greater extent than goods from expanding states to contracting states. Then you'd come across a micro resultant but no macro effect. I don't mean value that's the instance , but I remove maintain been skeptical nearly other papers jumps from micro to macro. For illustration , if the Federal regime spends a trillion dollars inwards the desert , in addition to a bunch of businesses movement to sell donuts to the structure workers , you lot larn a prissy stimulus. That doesn't hateful stimulus industrial plant for the economic scheme every bit a whole.
This is a modest nitpick. The basic fact is interesting , in addition to I mean value a lot harder to dismiss.
It's interesting that thus much of the pushback , both from Bob in addition to from Mike Konczal's critical review comes downwardly to theory , non the fact.
Update: Wednesday's Wall Street Journal covers the paper. The WSJ spends to a greater extent than fourth dimension on the macro inquiry , the claim that unemployment insurance genuinely boosts the economic scheme via stimulus.
This is a modest nitpick. The basic fact is interesting , in addition to I mean value a lot harder to dismiss.
It's interesting that thus much of the pushback , both from Bob in addition to from Mike Konczal's critical review comes downwardly to theory , non the fact.
Update: Wednesday's Wall Street Journal covers the paper. The WSJ spends to a greater extent than fourth dimension on the macro inquiry , the claim that unemployment insurance genuinely boosts the economic scheme via stimulus.
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