Full Citation

Title: Cost of policy choices: A microsimulation analysis of the impact on family welfare of unemployment and price changes

Citation Type: Journal Article

Publication Year: 2020

ISBN:

ISSN: 01640704

DOI: 10.1016/j.jmacro.2019.103167

NSFID:

PMCID:

PMID:

Abstract: This paper calculates the welfare cost to families of an unemployment shock. Using U.S. data, we find an average annualized expected dollar equivalent welfare loss of $1,156 when the unemployment rate rises by one-percentage point. Relative to single families, the welfare loss is greater for married families and increases with education. We also estimate that a loss in purchasing power of 1.8% generates the same amount of welfare loss as a one percentage point rise in the unemployment rate. Additionally, the magnitude of the shock to purchasing power that a family is willing to endure to avoid a one percentage point increases in the aggregate unemployment rate rises with income. The results in this paper informs policy makers about the distributional implications of decisions likely to affect labor markets.

Url: https://www.sciencedirect.com/science/article/pii/S0164070419300515

Url: https://linkinghub.elsevier.com/retrieve/pii/S0164070419300515

User Submitted?: No

Authors: Hotchkiss, Julie L.; Moore, Robert E.; Rios-Avila, Fernando

Periodical (Full): Journal of Macroeconomics

Issue:

Volume: 63

Pages: 103167

Data Collections: IPUMS CPS

Topics: Family and Marriage, Labor Force and Occupational Structure, Other

Countries: