Reservation Benefits: Assessing job acceptance impacts of increased UI payments
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 .
File(s): File format is application/pdf https://www.frbsf.org/economic-research/files/wp2020-28.pdf
Provider: Federal Reserve Bank of San Francisco
Part of Series: Working Paper Series
Publication Date: 2020-08-04