EMPLOYMENT AND WELFARE PARTICIPATION AMONG WOMEN

The model makes a distinction between "voluntary" and "involuntary" welfare receipt. the findings suggest that among female heads of households, the increase in welfare receipt that occured between 1967 and 1979 was almost completely attributable to an increase in involuntary unemployment and an increase in the proportion of the population that was eligible for welfare (due to changes in program parameters). The passage of time, used as a proxy for changes in the stigma associated with receiving welfare, appears to be a secondary importance. The labor supply response to welfare programs is small, and possibly diminishing over time.     

BEYOND KEYNESIANISM AND MONETARISM

Though there is consensus among economists about microeconomic theory, neither the Keynesian nor the Monetarist theory of macroeconomics has attracted a consensus, presumably because neither is compelling enough to persuade the skeptical. A new approach to the subject that combines insights from each of the familiar schools with considerations that both schools have overlooked is accordingly offered here. This argument accepts the evidence that involuntary unemployment and depressions sometimes occur and thus rejects the finding of the new classical or equilibrium macroeconomics, that markets always clear and that all individuals and firms are in equilibrium. It also rejects the Keynesian assumption of wages or prices arbitrarily fixed at disequilibrium levels, and insists that any adequate theory must show what interests are served by the existence of involuntary unemployment. The theory offered here shows that an institutional or organizational arrangement common in all societies which have experienced widespread unemployment and deep recessions entails that many firms and individuals will be in disequilibrium. This disequilibrium becomes more severe when there is unexpected deflation or disinflation. The disequilibrium is of precisely the type commonplace in recessions and entails involuntary unemployment. The theory also shows how groups of individuals and firms can gain from practices that entail involuntary unemployment and underutilization of resources for others.     

Job security and unemployment in an efficiency-wage model

Job security and its effects on unemployment are controversial issues. I investigate the effects of job security in an efficiency-wage model of unemployment. Though efficiency-wage ideas have wide appeal and provide strong foundations of involuntary unemployment, not much has been written about the ramifications of job security in these scenarios. I show that job security creates wage and unemployment effects when efficiency-wage aspects are relevant, because employment guarantees shift the burden of workers' effort attraction to the wage mechanism. These effects are further enhanced when workers have some bargaining power. My results, therefore, suggest a trade-off between employment stability and employment: High employment security leads to smaller employment (or larger involuntary unemployment). I thank Ron Oaxaca and participants at the W.E. Upjohn Conference on Unemployment Insurance for useful comments.     

EFFICIENCY WAGE MODELS OF UNEMPLOYMENT-ONE VIEW

Persistent wage rigidity and involuntary unemployment appear to be recurrent problems in most economies. What could be preventing the wage adjustment necessary to clear the labor market? Many recent papers claim to have found the answer in efficiency wage models. This paper surveys this literature and attempts to evaluate its accomplishments. It concludes that the efficiency wage models fail to explain wage rigidity or persistent involuntary unemployment.     

Absenteeism and the risk of involuntary unemployment: A dynamic analysis

Absence from work is a risky activity for an employed worker, as it may lead to dismissal and involuntary unemployment. The cost of unemployment to a worker depends, however, on absence behavior had the worker remained employed. Hence, absence decisions over time are interrelated. This article examines the dynamic and some comparative static aspects of the absence decision under uncertainty: the nature of its variation over time, its response to variations in the unemployment rate, and its alleged subjection to a moral hazard effect in the presence of an unemployment insurance program.     

COMMODITY TAXATION IN WELFARE STATES

Unemployment is a central policy issue in countries with a “generous” welfare system that is hard to reform. This paper addresses why these countries tend to adopt high commodity tax rates in the optimal taxation context. We explore the role of commodity taxation in alleviating moral hazard and hence involuntary unemployment and then provide supportive evidence from a quantitative analysis. Unlike the usual full employment models, at the heart of this paper is a new dimension of distortion, the “between‐states” (employment state vs. unemployment state) consumption choice distortion, which can be dealt with by a certain optimal combination of commodity and income taxation. Our results therefore offer an explanation for the widely observed coexistence of direct and indirect taxation. (JEL D61, D81, H21)     

Correlates of Voluntary vs. Involuntary Part‐time Employment among US Women

This article presents a study of the extent to which type and duration of labour force attachment add to the explanatory power of psychological, demographic, and family household characteristics to predict voluntary (n=166) vs. involuntary part‐time (n=160) employment of women in the United States. We use the terms ‘voluntary’ and ‘involuntary’ to reflect the woman's choice in accepting to work in paid part‐time employment. In this context, voluntary part‐time work is not meant to be construed as charitable, non‐paid activities, but rather is construed as individuals who are working part‐time but who would prefer to be working full‐time, if a suitable job were available. Using data from the National Longitudinal Survey of Labor Market Experience (NLSLME), we found that labour market attachment characteristics added little to predict part‐time employment status (involuntary vs. voluntary) and had virtually no effect on the odds of any other correlates on employment status. The major exception was number of years of unemployment. The longer working women were previously unemployed, the greater the likelihood they were involuntarily employed in part‐time jobs. In addition, we found that marriage and private sector employment decreased the likelihood of involuntary part‐time employment. Findings suggest that involuntarily part‐time employed women appear to be ‘settling’ for what they can get, namely, part‐time rather than full‐time jobs and that unmarried part‐timers may be viewed as a stigmatized or marginal group more likely to be employed in the public rather than private sector. Policy implications and future research are discussed.     

LABOR MARKET SHARE CONTRACTS WHEN THE FIRM HAS TWO VARIABLE INPUTS

This paper extends Weitzman's analysis of share contracts. Firstly, a second variable input is introduced into a firm's production technology. Some share contracts give the firm an incentive to reduce worker compensation by manipulating the second variable input. This implies that contracts which possess this property cannot support the same long-run equilibrium as would be achieved with a wage contract. Secondly, a positively sloped labor supply curve is introduced. It is shown that while share contracts reduce involuntary unemployment, they may not reduce total unemployment vis-a-vis wage contracts. The paper identifies the factors which determine relative employment variability.     

AN EXPERIMENTAL INVESTIGATION OF RESEARCH TOURNAMENTS

Research tournaments are predicted to encourage R&D. Recent theoretical developments in research tournaments are grounded in search theory. Although the economic intuition behind tournaments is straightforward, computing equilibrium strategies is complex. The participants compute a stopping rule based on the number of participants, the prize and the cost of research. It is an empirical question whether agents will behave as predicted or will employ simple "rule of thumb" strategies such as taking a predetermined number of draws. This paper reports the results of a series of laboratory experiments designed to test the predictions of the search model of tournaments. ( JEL C9, D8)     

Surviving Involuntary Unemployment Together: The Role of Resilience-Promoting Communication in Familial and Committed Relationships

Involuntary unemployment is an unfortunate circumstance not only for those without meaningful work, but also for families, family relationships, and committed long-term relationships. To explore the role that communication plays in helping family partners demonstrate resilience (i.e., competence and adaptation throughout the experience of a stressor), while dealing with involuntary unemployment, the current study surveyed a sample of 111 recently unemployed, relationally involved participants. The majority of these participants self-reported as married (40.6%) or indicated serious commitment (38.6%) with their relational partner. Communication strategies perceived as contributing to resilience with their partner were measured as Resilience-Promoting Communication (RPC). Bootstrapping mediation analysis determined that RPC dimensions emphasizing respect/harmony, partnership and tension release contributed to mediation of the relationship between feelings about job loss on relational satisfaction and commitment. In addition, respect/harmony moderated the relationship between both unemployment affect and commitment and satisfaction. Civility moderated the relationship between unemployment affect and satisfaction. Implications of these findings for theory and for families dealing with unemployment are discussed.     

Underemployment and depression: longitudinal relationships

We conceptualize employment status not as a dichotomy of working versus not working but as a continuum ranging from adequate employment to inadequate employment (involuntary part-time or low wage) to unemployment. Will shifts from adequate to inadequate employment increase depression as do shifts from employment to unemployment, and to what extent does prior depression select workers into such adverse employment change? We analyze panel data from the National Longitudinal Survey of Youth for the years 1992-1994 for the 5,113 respondents who were adequately employed in 1992. Controlling for prior depression, both types of adverse employment change resulted in similar, significant increases in depression. These direct effects persisted despite inclusion of such potential mediators as changes in income, job satisfaction, and marital status. Marital status buffered the depressive effect of both types of adverse change, but education and job dissatisfaction amplified the effect of unemployment on depression. Prior depression did not predict higher risk of becoming inadequately employed but did predict increased risk of unemployment, particularly for those with less education. These results confirm that both unemployment and inadequate employment affect mental health, and they invite greater efforts to monitor the extent and impact of underemployment.     

Explaining differences in the political meaning of unemployment across time and space

This article is a first attempt at theorizing the differences in the political meaning of unemployment and how governments create these differences. It first reviews existing explanations about why unemployment is an especially pressing political threat to those in power. In lieu of a an existing literature on the sources of variation in this threat, the next section puts forward four alternative explanations based on related arguments about politics and the economy. These are the approaches of power resources, protest mobilization, deprivation, and ideology. Guided by the promises and pitfalls of these respective theories, the subsequent section argues for an alternative institutional-constructivist approach. Starting with the historical observation that the category of unemployment was invented alongside particular social institutions and employment practices, this approach seeks to explain how variation in these institutionalized practices is responsible for differences in the political salience of unemployment. The section that follows discusses how government policies can reconstruct the meaning of unemployment by reconfiguring the available set of institutional choices in the labor market and by designating what kinds of choices constitute involuntary joblessness. It is argued that “unemployment” is defined against institutionalized norms of what kinds of work constitute “employment.” Changes in the boundaries of the concept of unemployment come about through changes in the ways that governments hold certain kinds of work as exemplary while granting other forms of work lesser recognition. The final section considers how this reciprocal relationship between the construction of unemployment and employment both imposes political constraints for governments and creates opportunities. Governments face numerous conflicting incentives whether to expand or restrict the institutionalized definition of unemployment. While they must retain semblance with inherited conceptions of unemployment; they can redefine the problem of unemployment through the institutionalization of new solutions.     

INVOLUNTARY, EMPLOYMENT IN CONTRACTS WITH RISKY JOB SEARCH

The implication of partially insurable job search risk for incentive compatibility in a standard contracting framework are explored. When unemployment spells provoke job search, workers face risk in spell duration and reemployment wages. When search effort is not variable, contracts including unemployment insurance will yield involuntary employment. When search effort is diminished by UI benefits, firms shift some compensation back to wages, increasing the relative attractiveness of employment. The analysis begins with a theorem on incomplete insurance by Imai, Geanakoplos and Ito [1981] for which a simple proof and economic intuition are provided.     

LABOR QUEUES AND INVOLUNTARY UNEMPLOYMENT

This paper outlines a job search model which emphasizes the placing of applications by job searchers and the firm's use of a queue of applicants as an inventory of labor. The paper analyzes the consequences of the assumption that firms hold queues of applicants both for the decisions of a single firm and for a market composed of several such firms. The aggregate results suggest that considering such labor market queuing helps explain wage rigidity and involuntary unemployment.     

An integrative perspective on the psychological response of women and men to unemployment

The psychological response to involuntary unemployment in men and women is discussed within a developmental systems model adapted from Ketz de Vries. The response to work loss is seen as a complex and multifaceted response to a specific critical event which is affected by concurrent and previous strings of critical events and role transitions and the overall constellation of psychosocial and sociocultural influences on the adaptation of men and women. Gaps in the research evidence are pointed out and directions for future research are suggested.     

A PRIMER ON CARDINAL VERSUS ORDINAL TOURNAMENTS

This paper fills in a gap in the tournament literature by developing a framework that can be used to analyze both cardinal and ordinal tournaments, as well as piece rates. The analysis aims to obtain a Pareto ranking of cardinal versus ordinal tournaments, which is an open question in the literature. The analysis shows that, surprisingly, cardinal tournaments are superior to ordinal tournaments. The rationale is that, by utilizing all the available information more efficiently, cardinal tournaments allow the principal to implement higher power incentives, which makes them superior even though they restrict the form of the contract more than ordinal tournaments. (JEL D82, D21)     

Patterns and correlates of involuntary unemployment and underemployment in single-mother families

Economic downturns, trends in the increased number of single-mother families and women entering the workforce, recent welfare reforms that make receipt of cash benefits contingent on employment, and changes in the economic environment that have increased employment problems, all highlight the importance of examining unemployment and underemployment particularly among single-mother families. The current study used the 2004 panel of the Survey of Income and Program Participation (SIPP) to examine patterns and correlates of unemployment and underemployment among single-mother families. The results indicate fairly substantial employment problems. Although approximately one-half (55.6%) of the single mothers had adequate employment, 30% experienced unemployment or involuntary job gaps, and approximately 15% experienced underemployment. Results further indicate that age, education level, past work experience, and homeownership are related to a reduced risk of employment problems. On the other hand, work disability, other family income, receipt of cash benefits, and state unemployment rates place single mothers at an increased risk of unemployment and underemployment. The findings suggest social policy implications and targeted assistance for those at-risk single mothers trying to secure adequate employment.     

A Stochastic Monopsony Theory of the Business Cycle

Two distinct regimes, contractions and expansions, are generated in a model in which goods markets clear and all individuals are optimizing, strict wage and price takers, have fully rational expectations, and are heterogeneous in both preferences and resource endowments. Involuntary unemployment, asymmetric monetary policy effectiveness, and a changing relationship between real wages and employment over the business cycle are the result of optimizing behavior by monopsonistic, wage-setting, and price-taking firms faced with price uncertainty, an upward-sloped supply of employees, and efficiency wage behavior. Disequilibrium and involuntary unemployment can occur at the level of the individual firm's labor market.     

Replication: Emotional well-being and unemployment – Evidence from the American time-use survey

We use data from the well-being module of the American Time-Use Survey (ATUS) 2010–2013 to reexamine the relationship between unemployment and emotional well-being. We replicate two previous studies (Krueger & Mueller, 2012; Dolan, Kudrna, & Stone, 2017) which have produced differing findings on this relationship, and analyze what factors cause the differences in their outcomes. We find that the results critically depend on the definition of employment statuses and the choice of well-being measure. The unemployed appear sadder and more in pain than the employed, but no other emotion queried in the ATUS has worse values for the unemployed than for the employed. Aggregate emotional well-being measures suggest that unemployment is not negatively related to emotional well-being. Applying a wider instead of narrow definition of unemployment tends to result in better emotional well-being scores for the unemployed, mainly because job leavers and new or re-entrants into the labor market report better emotions than the group of people who are unemployed due to an involuntary job loss.     

Three Poems

Within Southern Appalachia there are distinct, historic patterns of exploitation. These patterns have helped to give shape to certain cultural tendencies that are strikingly similar to the clinical manifestations of groups who have experienced traumatic stress. Once normative adaptations to the well documented crises that come with unemployment, over the generations they became ingrained in the culture. The resulting cultural traits-an enduring sense of resignation, deep depression, and disrupted relationships represent the presence of a culturally transmitted traumatic stress syndrome that is induced by exploitation.