Interactions In Labour Force Status, as Revealed by proxy Utility Data

Andrew Clark

Annals of Economics and Statistics, 2001, issue 63-64, 21-38

Abstract: This paper tests for comparison effects in proxy utility data. I show that the utility loss from unemployment (relative to employment) is smaller the higher is the rate of unemployment in three different reference groups. This utility loss is then shown to be correlated with both job search activity and finding a new job. These results suggest a psychological model of unemployment "hysteresis", where a negative shock reduces the utility premium from working.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2001:i:63-64:p:21-38

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