Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation

M. Daniele Paserman

Economic Journal, 2008, vol. 118, issue 531, 1418-1452

Abstract: This article estimates the degree of hyperbolic discounting in a job search model quantitatively, using data on unemployment spells and accepted wages from the NLSY. The results point to a substantial degree of hyperbolic discounting for low and medium wage workers. The structural estimates are then used to evaluate alternative policy interventions aimed at reducing unemployment. The estimated effects of a given policy can vary by up to 40%, depending on the assumed type of time discounting. Some interventions may raise the long‐run utility of hyperbolic workers, and at the same time reduce unemployment duration and lower government expenditures.

Date: 2008
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https://doi.org/10.1111/j.1468-0297.2008.02175.x

Related works:
Journal Article: Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation (2008)
Working Paper: Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation (2004)
Working Paper: Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation (2004)
Working Paper: Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation (2004)
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