• DOI:10.1257/APP.20160257
Corpus ID: 54963445

Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment

@article{Borgschulte2018PayingTA,
  title={Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment},
  author={Mark Borgschulte and P. Martorell},
  journal={Econometric Modeling: Microeconometric Models of Household Behavior eJournal},
  year={2018}
}

Mark Borgschulte, P. Martorell

Published 2018

Economics

Econometric Modeling: Microeconometric Models of Household Behavior eJournal

This paper provides revealed-preference estimates of the monetary value of avoiding job search in a high-unemployment labor market by examining the behavior of military servicemembers deciding between reenlisting and exiting the military. We find that servicemembers would sacrifice 1.5-2% in earnings in exchange for avoiding a one percentage point increase in the home-state unemployment rate. Comparing these estimates to realized losses in post-service civilian earnings resulting from exiting… CONTINUE READING

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