Discussion on Nakajima�s "A Quantitative Analysis ofUnemployment Bene�t Extensions"
Marco Cozzi
Queen�s University
AEA Meetings Chicago 2012
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 1 / 10
UI Extensions - Why Do We Care?
Great Recession ! soaring costs of the UI program.
Potential issue with UI extensions: distortions in the search margin.
This paper: too much insurance vis-à-vis incentives, unemployedpeople are enjoying leisure at the expenses of lucky/productiveworkers.
It accounts for a third of the increase in the unemployment rate!
Additional issue (not here): who pays for the costs? Futuredistortionary taxation and RE.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 2 / 10
UI Extensions - Why Do We Care?
Great Recession ! soaring costs of the UI program.
Potential issue with UI extensions: distortions in the search margin.
This paper: too much insurance vis-à-vis incentives, unemployedpeople are enjoying leisure at the expenses of lucky/productiveworkers.
It accounts for a third of the increase in the unemployment rate!
Additional issue (not here): who pays for the costs? Futuredistortionary taxation and RE.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 2 / 10
UI Extensions - Why Do We Care?
Great Recession ! soaring costs of the UI program.
Potential issue with UI extensions: distortions in the search margin.
This paper: too much insurance vis-à-vis incentives, unemployedpeople are enjoying leisure at the expenses of lucky/productiveworkers.
It accounts for a third of the increase in the unemployment rate!
Additional issue (not here): who pays for the costs? Futuredistortionary taxation and RE.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 2 / 10
UI Extensions - Why Do We Care?
Great Recession ! soaring costs of the UI program.
Potential issue with UI extensions: distortions in the search margin.
This paper: too much insurance vis-à-vis incentives, unemployedpeople are enjoying leisure at the expenses of lucky/productiveworkers.
It accounts for a third of the increase in the unemployment rate!
Additional issue (not here): who pays for the costs? Futuredistortionary taxation and RE.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 2 / 10
UI Extensions - Why Do We Care?
Great Recession ! soaring costs of the UI program.
Potential issue with UI extensions: distortions in the search margin.
This paper: too much insurance vis-à-vis incentives, unemployedpeople are enjoying leisure at the expenses of lucky/productiveworkers.
It accounts for a third of the increase in the unemployment rate!
Additional issue (not here): who pays for the costs? Futuredistortionary taxation and RE.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 2 / 10
U.S. Labor Market Facts (Cooley-Rupert Report)
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 3 / 10
U.S. Labor Market Facts (Cooley-Rupert Report)
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 4 / 10
"Pro�s"
Very carefully executed (institutional details).
A structural model can consider the speci�c nature of the enacted UIextensions.
Can study interesting and relevant counterfactuals.
Serious robustness analysis.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 5 / 10
"Pro�s"
Very carefully executed (institutional details).
A structural model can consider the speci�c nature of the enacted UIextensions.
Can study interesting and relevant counterfactuals.
Serious robustness analysis.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 5 / 10
"Pro�s"
Very carefully executed (institutional details).
A structural model can consider the speci�c nature of the enacted UIextensions.
Can study interesting and relevant counterfactuals.
Serious robustness analysis.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 5 / 10
"Pro�s"
Very carefully executed (institutional details).
A structural model can consider the speci�c nature of the enacted UIextensions.
Can study interesting and relevant counterfactuals.
Serious robustness analysis.
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 5 / 10
"Con�s"
Nature, persistence and propagation mechanism of the aggregateshock.
Is the shock just a productivity shock, or it might relate to thee¢ ciency of matching too?
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 6 / 10
"Con�s"
Nature, persistence and propagation mechanism of the aggregateshock.
Is the shock just a productivity shock, or it might relate to thee¢ ciency of matching too?
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 6 / 10
Beveridge Curve, JOLTS
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 7 / 10
Beveridge Curve in the Past, HWPAI (Cleveland FED)
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 8 / 10
"Con�s"
There are no skill mismatch considerations.
Employers learning on unemployed types (Kubler-Saint Paul JLE 04).
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 9 / 10
"Con�s"
There are no skill mismatch considerations.
Employers learning on unemployed types (Kubler-Saint Paul JLE 04).
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 9 / 10
Job Openings Vs. Separations
Cozzi (Queen�s University ) Nakajima - Discussion AEA Meetings Chicago 2012 10 / 10