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Interactions In Labour Force Status, as Revealed by proxy Utility Data

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  • Andrew E. Clark

Abstract

This paper tests for comparison effects in proxy utility data. I show that the utility loss from unemployment (relative to employment) is smaller the higher is the rate of unemployment in three different reference groups. This utility loss is then shown to be correlated with both job search activity and finding a new job. These results suggest a psychological model of unemployment "hysteresis", where a negative shock reduces the utility premium from working.

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  • Andrew E. Clark, 2001. "Interactions In Labour Force Status, as Revealed by proxy Utility Data," Annals of Economics and Statistics, GENES, issue 63-64, pages 21-38.
    • Handle: RePEc:adr:anecst:y:2001:i:63-64:p:21-38
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    File URL: http://www.jstor.org/stable/20076294
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    Cited by:

    1. Jahn, Elke J. & Wagner, Thomas, 2005. "Contractual Employment Protection and the Scarring Risk of Unemployment," IZA Discussion Papers 1813, Institute of Labor Economics (IZA).
    2. Rainer Winkelmann, 2002. "Subjektive Daten in der empirischen Wirtschaftsforschung: Probleme und Perspektiven," SOI - Working Papers 0207, Socioeconomic Institute - University of Zurich, revised Jul 2002.

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