Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331373 
Year of Publication: 
2025
Series/Report no.: 
CEBI Working Paper Series No. 08/25
Publisher: 
University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI), Copenhagen
Abstract: 
I examine whether individuals' subjective unemployment expectations and self-insurance behavior are systematically related to unemployment experiences within their social networks. Using a combination of survey-elicited subjective unemployment expectations and Danish administrative data, I document three main findings. First, peer job loss is strongly predictive of individuals' own future unemployment risk, even after controlling for fixed effects and prior outcomes - suggesting that peer unemployment carries information about latent labor market conditions. Second, individuals' subjective unemployment expectations respond to recent unemployment among peers, particularly when the individuals have little experience of their own. Third, peer job loss exposure is associated with precautionary behavior, including higher take-up of private unemployment insurance and increased transitions to lower-turnover jobs.
Subjects: 
Expectations
Information
Unemployment
Self-Insurance
JEL: 
D83
J64
Document Type: 
Working Paper

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