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Subjective unemployment expectations and (self-)insurance

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  • Hartmann, Ida Maria
  • Leth-Petersen, Søren

Abstract

We study subjective unemployment expectations and their influence on economic behavior. We utilize a longitudinal data set combining survey elicited subjective unemployment expectations with administrative data on income, savings, and unemployment insurance. Our findings indicate that subjective expectations hold valuable predictive information about subsequent unemployment experiences. We find that individuals tend to overestimate their risk of unemployment. Moreover, higher unemployment expectations lead to a greater likelihood of enrolling in unemployment insurance and accumulation of liquid savings.

Suggested Citation

  • Hartmann, Ida Maria & Leth-Petersen, Søren, 2024. "Subjective unemployment expectations and (self-)insurance," Labour Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000745
    DOI: 10.1016/j.labeco.2024.102579
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    More about this item

    Keywords

    Unemployment expectations; Unemployment insurance; Partial insurance;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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