Facebook Twitter LinkedIn

From Britmouse:

(I’m getting senile—this link turns out to be 2 years old. But still worth revisiting.)

But here’s a new paper by Andrew Johnston and Alexandre Mas, sent to me by John Thacker. Here’s the abstract:

In this paper we examine how an unanticipated cut in potential unemployment insurance (UI) duration, which reduced maximum duration in Missouri by 16 weeks, affected the search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate that a one-month reduction in maximum duration is associated with 15 fewer days of UI receipt and 8.6 fewer days of nonemployment. We use the RDD estimates to simulate the change in the time path of the unemployment rate assuming there are no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment, the labor market was able to absorb this influx of workers without crowding out other jobseekers.

Shorter version: Krugman’s wrong again.

Facebook Twitter LinkedIn

Tags:

This entry was posted on June 12th, 2015 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or Trackback from your own site.



