Running out of time: Limited unemployment benefits and reservation wages

Akin, S. Nuray; Platt, Brennan C.

doi:10.1016/j.red.2011.06.001

Cited by 11 publications

(8 citation statements)

References 28 publications

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“…27 It is only after randomly arriving to the market that buyers differ ex-post, leading to a continuum of dispersed prices. Deadlines had a similar effect for declining reservation wages among unemployed workers in Akın and Platt (2012); although there, workers passively responded to posted job offers, rather than buyers actively selecting bid strategies here. Also, labor markets lack the auction mechanism to extract and record reservation wages throughout a search spell.…”

Section: Price Dispersionmentioning

confidence: 80%

“…17 Aside from deadlines, other features that can lead to non-stationary search include price-matching guarantees (Janssen and Parakhonyak, 2013), costs incurred to recall past offers (Janssen and Parakhonyak, 2014), or the possibility that past quotes will not be honored (Akın and Platt, 2014). The spatial search model of taxi drivers in Buchholz (2018) also yields non-stationarity, and includes a deadline element with drivers approaching the end of their shift.…”

Section: Bids Over Duration Of Searchmentioning

confidence: 99%

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Discounts and Deadlines in Consumer Search

Coey

Larsen

Platt

2020

American Economic Review

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We present a new equilibrium search model where consumers initially search among discount opportunities, but are willing to pay more as a deadline approaches, eventually turning to full-price sellers. The model predicts equilibrium price dispersion and rationalizes discount and full-price sellers coexisting without relying on ex ante heterogeneity. We apply the model to online retail sales via auctions and posted prices, where failed attempts to purchase reveal consumers' reservation prices. We find robust evidence supporting the theory. We quantify dynamic search frictions arising from deadlines and show how, with deadline-constrained buyers, seemingly neutral platform fee increases can cause large market shifts. (JEL D11, D44, D83, L81)

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Section: Price Dispersionmentioning

confidence: 80%

Section: Bids Over Duration Of Searchmentioning

confidence: 99%

Discounts and Deadlines in Consumer Search

Coey

Larsen

Platt

2020

American Economic Review

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“…We consider the nil to slightly negative effects of the US on earnings consistent with a model like the one presented by Akin and Platt (2011). In their model, the benefits of unemployment insurance increase the worker s reservation wage, nonetheless, as the subsidy received draws closer to its expiration date, the worker s reservation wage falls, making him more desperate for a job.…”

Section: Discussionmentioning

confidence: 92%

“…In addition, although in Akin and Platt (2011) increases in the length of the benefit increase wages, that effect is much less than the one caused by increases in the amount of the subsidy, leading in the net to a reduction of earnings.…”

Section: Discussionmentioning

confidence: 94%

“…Remember that in addition to the mentioned effects in the Akin and Platt (2011) unemployment insurance model, in Colombia s case, an unemployment subsidy does not require individuals to search or be eligible for jobs. Some individuals, those with the lowest earnings (and thus with a relatively much higher replacement rate), might be willing to quit their jobs in order to benefit from the US, as they do it in a similar setup presented by Hansen and Imrohoroglu (1992).…”

Section: Discussionmentioning

confidence: 99%

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The unemployment subsidy program in Colombia: an assessment

Medina-Durango¹,

Nuñez-Méndez²,

Tamayo-Castaño³

et al. 2013

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We assess the effects of the Colombian Unemployment Subsidy (US) program on future labor participation, unemployment, formality, school attendance and earnings of its beneficiaries, on household earnings and school attendance of the household members, and on weight and height of their children at birth. In addition to providing benefits, the program also provides training to some recipients. We use regression discontinuity and matching differences-indifferences estimators and find that both approaches indicate that participation in the labor market, the earnings of beneficiaries, and household income, do not increase, and for some populations decrease during the 18 months after leaving from the Unemployment Subsidy program. Enrollment in formal health insurance falls. The effects on male household heads include larger reductions in their earnings, larger decreases in their labor participation, and greater increases in their unemployment rates. We also find a small though statistically significant positive effect of the program on school attendance of the beneficiaries, but none on their children s weight or height at birth. The results also are sensitive to the type of training that beneficiaries receive in the Unemployment Subsidy program. Overall, the program serves as a mechanism for smoothing consumption and providing social assistance rather than as a mechanism for promoting a more efficient labor market.

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A theory of search with deadlines and uncertain recall

Akin

Platt

2013

Econ Theory

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Running out of time: Limited unemployment benefits and reservation wages

Cited by 11 publications

References 28 publications

Discounts and Deadlines in Consumer Search

Discounts and Deadlines in Consumer Search

The unemployment subsidy program in Colombia: an assessment

A theory of search with deadlines and uncertain recall

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