tag:blogger.com,1999:blog-1110014885778996459.post7662208500935274835..comments2024-03-18T19:57:52.444-07:00Comments on Idiosyncratic Whisk: February 2014 Labor Report Review & Beveridge Curve notesKevin Erdmannhttp://www.blogger.com/profile/07431566729667544886noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1110014885778996459.post-51536969007607687382014-03-08T20:15:06.948-07:002014-03-08T20:15:06.948-07:00Thanks for your response, and the references.
Reg...Thanks for your response, and the references.<br /><br />Regarding (1), there are many studies that give a range of relationships, and some are much higher than the Farber Valletta study. Here is a study by David Grubb at OECD:<br />http://www.iza.org/conference_files/UnIRe2011/grubb_d6938.pdf<br /><br />Here's a GAO survey that shows behavior of workers who exhausted EUI. Less than 1/5 left the labor force. Also, they skew very old:<br />http://www.gao.gov/assets/590/588680.pdf<br /><br />Regarding (2), have you seen this report from the Boston Fed?<br /><br />https://www.bostonfed.org/economic/ppb/2013/ppb131.pdf<br /><br />It shows different behavior by age and reason for losing a job. For older workers, unemployment rates for job leavers have been normal, but unemployment rates for job losers (eligilble for EUI) have been high. This pattern is not clear in middle-aged workers, and reverses among younger workers (young job losers look normal, but job leavers, reentrants, and new entrants have higher unemployment).<br /><br />I would suggest that this bifurcated behavior of the disaggregated Beveridge Curve is a sign of the distortions from EUI, and regular looking ST unemployment together with high LT unemployment is exactly what we would expect to see if we thought EUI would distort labor markets.<br /><br />Also, the job opening behavior is what you would see in a labor market with less intense available labor supply, as described in my oil analogy above. If there are job openings available in jobs where highly qualified and experienced workers are available, but are being less aggressive about taking new employment due to a temporary policy, then we should expect employers to be less aggressive about filling jobs with applicants from the willing pool of workers - much like the oil driller would be ambivalent about drilling $60 oil in a $100 market when they know that $40 oil is being kept under the ground by political issues.<br /><br />If I was looking for evidence that the unemployment rate was overstating slack in the labor market caused in part by EUI, your evidence from point (2) is the kind of thing I would expect to find. (Although, I'm sure there are issues in the recruiting intensity paper that would challenge my interpretation. I haven't gone through the whole thing.)<br /><br />In fact, my broad estimate of the extra unemployment coming from EUI is based on comparing unemployment durations under 26 weeks with unemployment durations over 26 weeks. There has always been a very tight relationship between these measures, which broke down in the recent recession.<br />http://idiosyncraticwhisk.blogspot.com/2013/08/more-on-duration-demographics-and.htmlKevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-50559064202172131082014-03-07T22:08:51.871-07:002014-03-07T22:08:51.871-07:00Kevin,
A few comments:
(1) Unemployment insuranc...Kevin,<br /><br />A few comments:<br /><br />(1) Unemployment insurance appears to have little effect on job finding rates, see Farber and Valletta (2013). The effect on the unemployment rate comes from labor-force dropouts -- but this merely presents the question of if we can expect labor-force dropouts to affect wage determination.<br /><br />(2) I'm very skeptical about your Beveridge curve analysis, for two reasons. For one, look up the paper by Davis, Faberman and Haltiwanger on "recruiting intensity." For another, look up the one by Rand Ghayad on long-term unemployment and the Beveridge curve. The former finds that those openings aren't "real" in the sense that employers are just sticking a line out to see if any highly qualified applicants bite -- they're not actively searching to fill the position; it's not absolutely necessary. The latter finds that when you just look at ST unemployment, there is no Beveridge curve shift. Both suggest that openings is a bad variable.Evan Soltashttps://www.blogger.com/profile/06212305798151301158noreply@blogger.com