Reservation Benefits: Assessing job acceptance impacts of increased UI payments

Nicolas Petrosky-Nadeau

No 2020-28, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Job acceptance decisions weigh the value of an entire job spell relative to remaining unemployed. There exists a reservation level of benefit payments in this dynamic decision problem at which an individual is indifferent between accepting and refusing an offer. This reservation benefit is a simple statistic to test the job acceptance deterrence effects of current unemployment insurance (UI) payments, summarizing the decision problem conditional on the believed state of the labor market and the weeks of UI compensation remaining. Estimating the reservation benefit for a wide range of US workers suggests few would turn down an offer to returnto work at the previous wage under the increased UI payments and extended duration provided by the CARES Act .

Keywords: Unemployment insurance; Job acceptance; COVID-19; Unemployment (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
Pages: 01-24
Date: 2020-08-04
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (5)

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DOI: 10.24148/wp2020-28

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