Marginal Jobs and Job Surplus: A Test of the Efficiency of Separations

98 Pages Posted: 30 Jan 2019 Last revised: 1 Sep 2021

See all articles by Simon Jäger

Simon Jäger

Massachusetts Institute of Technology (MIT); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; briq- Institute on Behavior & Inequality

Benjamin Schoefer

University of California, Berkeley

Josef Zweimüller

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Date Written: January 2019

Abstract

We present a test of Coasean theories of efficient separations. We study a cohort of jobs from the introduction through the repeal of a large, age- and region-specific unemployment benefit extension in Austria. In the treatment group, 18% fewer jobs survive. According to the Coasean view, the destroyed marginal jobs had low joint surplus. Hence, after the repeal, the treatment survivors should be dramatically more resilient than the ineligible control group survivors. Strikingly, the two groups instead exhibit identical post-repeal separation behavior. We provide and empirically support an alternative model in which wage rigidity drives the inefficient separation dynamics.

Suggested Citation

Jäger, Simon and Schoefer, Benjamin and Zweimueller, Josef, Marginal Jobs and Job Surplus: A Test of the Efficiency of Separations (January 2019). Available at SSRN: https://ssrn.com/abstract=3324115

Simon Jäger (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Benjamin Schoefer

University of California, Berkeley ( email )

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Josef Zweimueller

University of Zurich - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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