Subjective unemployment expectations and (self-)insurance

Ida Maria Hartmann and Søren Leth-Petersen

Labour Economics, 2024, vol. 90, issue C

Abstract: We study subjective unemployment expectations and their influence on economic behavior. We utilize a longitudinal data set combining survey elicited subjective unemployment expectations with administrative data on income, savings, and unemployment insurance. Our findings indicate that subjective expectations hold valuable predictive information about subsequent unemployment experiences. We find that individuals tend to overestimate their risk of unemployment. Moreover, higher unemployment expectations lead to a greater likelihood of enrolling in unemployment insurance and accumulation of liquid savings.

Keywords: Unemployment expectations; Unemployment insurance; Partial insurance (search for similar items in EconPapers)
JEL-codes: D14 D84 J6 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000745

DOI: 10.1016/j.labeco.2024.102579

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