Three Essays in the Economics of Unemployment and Aging.

Abstract

This dissertation examines the experiences of workers who lose their jobs. In particular, the three chapters consider the design of unemployment insurance (UI) programs and the unique aspects of facing unemployment near retirement ages. I find a number of results in these areas that are unaddressed by the existing literature.

I first exploit variation in UI benefits generated by the elimination of Social Security offsets, state-level policies that limit unemployment benefits available to Social Security recipients. I show that these policy changes are associated with more UI claiming for workers of Social Security age and that the additional claiming brings with it more self-reports of job search in survey data. However, this paper does not detect faster reemployment by these marginal labor force participants. Limited labor market opportunities for unemployed retirement-age workers may stunt the rate at which their additional search effort is translated to reemployment.

Next, I examine recent increases in UI job-search requirements in the United States. I compile novel data on work-search rules and use changes in these rules as plausibly exogenous variation in worker search effort. I show that increases in search requirements are associated with greater claimant search effort. However, unemployment durations are only very slightly reduced as a result of these increased efforts. I show that there is heterogeneity in the effects across labor market conditions and that search requirements are particularly ineffective in weak labor markets. The results suggest that the effectiveness of job-search policies is limited by the rationing of jobs in recessions.

Finally, I study the labor supply responses of workers near retirement age to their spouses’ job displacements. Households with multiple workers can theoretically insure against the job loss of one member's job with the increased labor supply of a spouse. This added worker effect has been documented for the average worker, but older workers differ from these workers in their attachment to the labor force and ability to find new jobs. I find that women over age 51 respond little to their husbands' displacements, while men increase their probability of employment following a spouse's displacement.