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Family Welfare and the Cost of Unemployment

Julie Hotchkiss, Robert Moore () and Fernando Rios-Avila ()

No 2017-7, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: This paper calculates the cost of an unemployment shock in terms of family welfare. We find that, overall, families face an average annualized expected dollar equivalent welfare loss of $1,156 when the unemployment rate rises by 1 percentage point. The average welfare loss for married families is greater than for single families and increases with education. We then estimate that a 1.8 percent shock to purchasing power would generate the same amount of overall welfare loss as a one-percentage-point rise in the unemployment rate.

Keywords: family welfare; joint labor supply; microsimulation dual mandate; monetary policy (search for similar items in EconPapers)
JEL-codes: D19 E52 I30 J22 (search for similar items in EconPapers)
Date: 2017-09-01, Revised 2019-07-01
New Economics Papers: this item is included in nep-lma and nep-mac
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