4-17 - - fewer quits - training- employee relations (good...

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Unemployment continued… I. Search - Evidence Experiment 1: Bonus Experiment If you find a job before using 11 weeks of benefits, then you get $500 bonus. After 11 weeks, you’re no longer eligible for bonus. Results: Duration of UI receipt decreased Probability of applying for benefits increased. No clear effect on the cost of UI Experiment 2: Search monitoring experiment Experiments had to provide names of 2 employers they talked to each week Contracts – nothing Results: Duration of UI receipt decreased Probability of applying for benefits: no change Effect on program cost: decrease Mcost2 Mcost1 Mbenefit Duration of unemployment - Problem Example from old exam: teenage unemployment Mcost1 Mcost2 Mbenefit Duration of unemployment Or benefit curve shifts out
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Mcost1 Mbenefit 2 Mbenefit1 Duration of unemployment - Employer search You can either search extensively (talking to a lot of people) or talking intensively (screening criteria comes into this) Other options employers have: - Paying high wages - then workers line up to get jobs
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Unformatted text preview: - fewer quits - training- employee relations (good HR functions)- fewer quits- referrals II. Types of Unemployment: Explaining youth unemployment A. Frictional- higher among young 1. One reason why young people may have high frictional unemployment is that young separate from jobs more often. If youre purpose for taking a job is for non-necessary commodities (e.g. paying for a luxury item), youre going to be in the job market more often. Teens are 13 times more likely to move from being employed to unemployed than adults 2. Another reason: ineffective job search havent figured out how to go through an interview, dress for it, fill out for job application. 3. Unemployment insurance? 4. parent (reduce cost of search) B. Demand deficient- when markets dont clear: Process of creaming picking out best workers and paying them high wages wage S rigid wage D1 D2 <unemployed> Q of labor Special minor minimums Minimum wage C. Structural...
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4-17 - - fewer quits - training- employee relations (good...

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