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Consumption and Unemployment

Mark Dynarski; Steven M. Sheffrin

University of California, Davis

This paper examines consumption changes of workers following experiences of unemployment in different stochastic environments. The model developed in the paper predicts that consumption changes following unemployment spells should be small for workers the higher are their layoff and recall probabilities. These predictions are confirmed in estimates with panel data.

DOI

10.2307/1885070

Volume

102 (2)

Pages

411

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