Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does Unemployment Insurance Crowd out Home Production?

Contents:

Author Info

  • Bulent Guler
  • Temel Taskin

Abstract

In this paper, we study the interaction between self insurance and public insurance. In particular, we provide evidence on a negative correlation between unemployment insurance benefits and home production using the American Time Use Survey (ATUS) and the state-level unemployment insurance data of the U.S. The empirical results suggest that moving to a two times more generous state would decrease time spent on home production about 22% for the unemployed. Then, we pursue a quantitative assessment of this empirical finding using a dynamic competitive equilibrium model in which households do home production as well as market production. The model is able to generate the empirical facts regarding the unemployment benefits and home production. The fact that unemployment insurance benefits crowd out home production is interpreted as a substitution between the two insurance mechanisms against loss of earnings during unemployment spells.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.tcmb.gov.tr/research/teblig/abstract/wp1323_eng.php
Download Restriction: no

Bibliographic Info

Paper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1323.

as in new window
Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:tcb:wpaper:1323

Contact details of provider:
Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara
Phone: (90 312) 507 5000
Fax: (90 312) 507 5640
Email:
Web page: http://www.tcmb.gov.tr
More information through EDIRC

Related research

Keywords: Unemployment insurance; home production; public insurance; self insurance; heterogeneous-agents models;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Greenwood, J. & Hercowitz, Z., 1991. "The Allocation of Capital and Time Over the Business Cycles," UWO Department of Economics Working Papers, University of Western Ontario, Department of Economics 9104, University of Western Ontario, Department of Economics.
  2. Card, David & Levine, Phillip B., 2000. "Extended benefits and the duration of UI spells: evidence from the New Jersey extended benefit program," Journal of Public Economics, Elsevier, Elsevier, vol. 78(1-2), pages 107-138, October.
  3. Krueger, Alan B. & Mueller, Andreas, 2010. "Job search and unemployment insurance: New evidence from time use data," Journal of Public Economics, Elsevier, Elsevier, vol. 94(3-4), pages 298-307, April.
  4. David M. Cutler & Jonathan Gruber, 1995. "Does Public Insurance Crowd Out Private Insurance?," NBER Working Papers 5082, National Bureau of Economic Research, Inc.
  5. Burda, Michael C & Hamermesh, Daniel S., 2009. "Unemployment, Market Work and Household Production," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7166, C.E.P.R. Discussion Papers.
  6. Benhabib, Jess & Rogerson, Richard & Wright, Randall, 1991. "Homework in Macroeconomics: Household Production and Aggregate Fluctuations," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(6), pages 1166-87, December.
  7. Nakajima, Makoto, 2012. "A quantitative analysis of unemployment benefit extensions," Journal of Monetary Economics, Elsevier, Elsevier, vol. 59(7), pages 686-702.
  8. Ortigueira, Salvador & Siassi, Nawid, 2013. "How important is intra-household risk sharing for savings and labor supply?," Journal of Monetary Economics, Elsevier, Elsevier, vol. 60(6), pages 650-666.
  9. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392 Elsevier.
  10. Albert Marcet & Francesc Obiols-Homs & Philippe Weil, 2002. "Incomplete markets, labor supply and capital accumulation," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 659, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2003.
  11. Alan B. Krueger & Andreas I. Mueller, 2012. "The Lot Of The Unemployed: A Time Use Perspective," Journal of the European Economic Association, European Economic Association, European Economic Association, vol. 10(4), pages 765-794, 08.
  12. Carole Roan Gresenz & Sarah E. Edgington & Miriam J. Laugesen & José J. Escarce, 2011. "Take-Up of Public Insurance and Crowd-out of Private Insurance Under Recent CHIP Expansions to Higher Income Children," NBER Working Papers 17658, National Bureau of Economic Research, Inc.
  13. Laurence J. Kotlikoff & Avia Spivak, 1979. "The Family as an Incomplete Annuities Market," NBER Working Papers 0362, National Bureau of Economic Research, Inc.
  14. Canova, Fabio & Ubide, Angel J., 1998. "International business cycles, financial markets and household production," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 22(4), pages 545-572, April.
  15. Yongsung Chang & Andreas Hornstein, 2006. "Home production," Working Paper, Federal Reserve Bank of Richmond 06-04, Federal Reserve Bank of Richmond.
  16. Gary D. Hansen & Ayse Imrohoroglu, 1990. "The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard," UCLA Economics Working Papers, UCLA Department of Economics 583, UCLA Department of Economics.
  17. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(4), pages 680-687, August.
  18. Raj Chetty & Emmanuel Saez, 2010. "Optimal Taxation and Social Insurance with Endogenous Private Insurance," NBER Chapters, National Bureau of Economic Research, Inc, in: Income Taxation, Trans-Atlantic Public Economics Seminar (TAPES), pages 85-114 National Bureau of Economic Research, Inc.
  19. Tsyvinski, A. & Golosov, M., 2004. "Optimal Taxation with Endogenous Insurance Markets," 2004 Meeting Papers, Society for Economic Dynamics 124, Society for Economic Dynamics.
  20. Low, Hamish & Meghir, Costas & Pistaferri, Luigi, 2007. "Wage Risk and Employment Risk Over the Life Cycle," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6187, C.E.P.R. Discussion Papers.
  21. Mark Aguiar & Erik Hurst, 2005. "Lifecycle Prices and Production," NBER Working Papers 11601, National Bureau of Economic Research, Inc.
  22. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, American Economic Association, vol. 87(1), pages 192-205, March.
  23. Taskin, Temel, 2011. "Unemployment insurance and home production," MPRA Paper 34878, University Library of Munich, Germany.
  24. Cutler, David M & Gruber, Jonathan, 1996. "The Effect of Medicaid Expansions on Public Insurance, Private Insurance, and Redistribution," American Economic Review, American Economic Association, American Economic Association, vol. 86(2), pages 378-83, May.
  25. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  26. Engen, Eric M. & Gruber, Jonathan, 2001. "Unemployment insurance and precautionary saving," Journal of Monetary Economics, Elsevier, Elsevier, vol. 47(3), pages 545-579, June.
  27. Mark Aguiar & Erik Hurst, 2005. "Consumption versus Expenditure," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 113(5), pages 919-948, October.
  28. Anderson, Patricia M & Meyer, Bruce D, 1993. "Unemployment Insurance in the United States: Layoff Incentives and Cross Subsidies," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(1), pages S70-95, January.
  29. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(3), pages 546-72, July.
  30. Mark A. Aguiar & Erik Hurst & Loukas Karabarbounis, 2011. "Time Use During Recessions," NBER Working Papers 17259, National Bureau of Economic Research, Inc.
  31. Finkelstein, Amy, 2004. "The interaction of partial public insurance programs and residual private insurance markets: evidence from the US Medicare program," Journal of Health Economics, Elsevier, Elsevier, vol. 23(1), pages 1-24, January.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Hone production vs. unemployment insurance
    by Economic Logician in Economic Logic on 2013-06-26 14:48:00

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tcb:wpaper:1323. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gulhanim Kayatas).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.