Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment

A-Tier
Journal: American Economic Journal: Applied Economics
Year: 2018
Volume: 10
Issue: 3
Pages: 101-27

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper provides revealed-preference estimates of the monetary value to workers of a lower unemployment rate at the time of job separation. By examining the decision between reenlisting and exiting the military, we find that service members would sacrifice 1.5-2 percent in earnings to avoid a 1 percentage point increase in the home-state unemployment rate during job search. Comparing these quantities to realized earnings losses for those who separate suggests that the value of non-work time and other factors (e.g., private and public transfers) offset less than one-third of the earnings losses caused by exiting the military into a weak labor market.

Technical Details

RePEc Handle
repec:aea:aejapp:v:10:y:2018:i:3:p:101-27
Journal Field
General
Author Count
2
Added to Database
2026-01-24