Andrew Johnston


Andrew C. Johnston Economics Merced

Andrew Johnston

Assistant Professor of Economics, University of California at Merced

Ph.D. in Applied Economics from The Wharton School, University of Pennsylvania

Fields: Public Economics, Labor Economics, Econometrics, Personnel Economics

Interests: Unemployment Insurance, Taxation, Compensation, Teacher Quality, Parent Absence

Contact: acjohnston (at) ucmerced (dot) edu

Curriculum vitae


Working Papers:

Unemployment Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data, Submitted [manuscript link]

To finance unemployment insurance benefits, states raise payroll taxes on employers who engage in layoffs. Since tax rates increase in response to layoffs, taxes are highest for troubled firms after downturns, potentially hampering labour demand and employment during recoveries. Using full-population administrative records from Florida, I estimate the causal effect of these targeted tax increases on firm behavior leveraging a regression kink design in the tax schedule. UI tax hikes reduce firm hiring and employment substantially, with no effect on layoffs or worker earnings. Analysis of heterogeneity and timing suggests the role of cash constraints in explaining the magnitude of the estimates. The results imply unanticipated costs of the financing regime which, once accounted for, reduce the optimal benefit calculation by a quarter.

Teacher Utility, Separating Eqiulibria, and Compensation Structure: Evidence from a Discrete-Choice Experiment, in Preparation

Improving schools depends largely on attracting and retaining high-quality teachers, a means made straightforward by understanding teacher preferences. Since these preferences cannot be estimated from naturally occurring choice data, I deploy a discrete-choice experiment where teachers have reason to reveal their preferences. Estimated utility suggests that the district overpays in retirement while underpaying in salary and merit rewards. If the best teachers have distinct preferences, compensation can be structured to differentially attract and retain them; high-quality teachers have preferences like other teachers for most attributes but have stronger preferences for schools offering merit rewards. I calculate willingness-to-pay for various nonpecuniary attributes of schools including time-to-tenure, class size, and grading support. The attribute that teachers most value is having a principal who supports them with disruptive students. Having such a principal is worth a 20 percent increase in salary and more than halves teacher costs to teaching in low-income settings. 


Potential Unemployment Insurance Duration and Labor Supply: Evidence from a Benefit Cut (with Alexandre Mas), Journal of Political Economy, 2018 [manuscript link] [journal link]

We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate a marginal effect of maximum duration on UI and nonemployment spells of approximately 0.45 and 0.25 respectively. We use the RDD estimates to simulate the unemployment rate assuming no market-level externalities. The simulated response, which implies almost a one percentage point decline in the unemployment rate, closely approximates the estimated change in the unemployment rate following the benefit cut. This finding suggests that, even in a period of high unemployment, the labor market absorbed this influx of workers without crowding-out other jobseekers.

The Effect of Unemployment Benefits on the Duration of Unemployment Insurance Receipt: New Evidence from a Regression Kink Design in Missouri, 2003-2013 (with David Card, Pauline Leung, Alexandre Mas, and Zhuan Pei), American Economic Review: P&P, 2015. [manuscript link] [journal link]

We provide new evidence on the elasticity of unemployment insurance weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering 2003-2013.  Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule.  We find that unemployment durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity of about 0.9 as compared to 0.35 pre-recession.

Coming Soon:

Parent Absence and Human Capital Formation: Evidence from Deployments in Peace Time (with Richard Patterson and David Lyle)

The Value of Commitment Contracts at Work (with Syon Bhanot and Benjamin Lockwood)

Johnston Wharton Graduation Economics


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