Research Papers

The reservation wage is an important element in equilibrium labor market models. In this paper, I use new government Benefit Accuracy Measurement (BAM) survey data on unemployment insurance (UI) claimants to study the relationships between reservation wages and labor market conditions. The direction of most measures is in accordance with the theory. While the layoffs rate coefficient aligns with the theory, the total separation rate deviates from it, due to the role of quits rate in the job separation rate. Among the main indicators, workers are most responsive to the employment-to-population ratio. Results also show that the aggregate employment indicators matter more than worker's group-specific measures, indicating that workers focus more on the aggregate market conditions. To introduce exogeneity, I include shift share measures in my specifications and find similar positive relationships between the reservation wage and the shift share measures. All results are robust to different sub-sample selections and specifications.

In August 2020, the US government introduced the Lost Wages Assistance Program, the purpose was to provide relief to the unemployed workers. Under the program, $300 additional payments were provided in addition to regular UI benefits. Using the Household Pulse Survey, this paper attempts to study the moral hazard effect of the program. I find that a 1% increase in the replacement rate due to LWA was associated with a 4% decrease in the probability of working. Using timing variation, I present the event study results that show a decrease in the working probability in the post period. To address treatment heterogeneity, I also include Callaway and Sant'anna estimator and find similar negative employment effects. The results are robust to various specifications and statistically significant among the subgroups as well.  

In June 2021, 23 states decided to end the pandemic-era UI extensions. In this paper, I exploit state-level variation to examine the impact of early withdrawal from FPUC (Federal Pandemic Unemployment Compensation) on housing outcomes. Initial results show that the early withdrawal from UI extensions had a negative impact on eviction and foreclosure. These findings imply that financial fragility remained elevated through the end of 2021 despite the resumption of growth in per capita incomes.