Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130366
Authors: 
Borgschulte, Mark
Martorell, Paco
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9680
Abstract: 
This paper provides revealed-preference estimates of the monetary value of avoiding job search in a high-unemployment labor market by examining the behavior of military servicemembers deciding between reenlisting and exiting the military. We find that servicemembers would sacrifice 1.5-2% in earnings in exchange for avoiding a one percentage point increase in the home-state unemployment rate. Comparing these estimates to realized losses in post-service civilian earnings resulting from exiting the military during times of high unemployment suggests that mitigating factors (e.g., leisure, private and public transfers) offset less than one-third of the earnings losses caused by entering a weak labor market.
Subjects: 
welfare cost of business cycles
labor market entry
military reenlistment
JEL: 
J30
J60
J65
Document Type: 
Working Paper

Files in This Item:
File
Size
474.84 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.