The Wages of Nonemployment

Male joblessness in the United States has risen significantly over the last half century, driven by an increase in the incidence of very long jobless spells and concentrated among the low-skilled. Motivated by this, we document the means by which those chronically out of work get by, how these means have evolved over time, and whether changes in the availability and generosity of nonwork benefits plausibly might have contributed to the rise of male joblessness. We find that the large rise in male nonemployment is challenging for canonical models of labor supply to explain given the empirical relationship between income and weeks work that we document. We explore the ability of refinements and extensions of canonical models to resolve this puzzle.