tag:blogger.com,1999:blog-4159906646513306121.post5592368232960267292..comments2023-11-19T20:38:50.237-08:00Comments on Economic Logic: Waiting for the perfect job does not workEconomic Logicianhttp://www.blogger.com/profile/10171296292101248614noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4159906646513306121.post-1011795721037432992011-04-04T09:34:56.234-07:002011-04-04T09:34:56.234-07:00"Controlling for other characteristics" ..."Controlling for other characteristics" is usually code for "controlling for the few characteristics we have convenient data for".<br /><br />No doubt prolonged unemployment and low quality jobs are both highly correlated with the market value of the applicant. No administrative data has a good view of that, so there is missing variable bias that should not be ignored. Correlation does not imply causation, especially not when there is another very obvious explanation for the correlation.<br /><br />We need a natural experiment or IV or something here.ilkkanoreply@blogger.comtag:blogger.com,1999:blog-4159906646513306121.post-49194440788496069802011-04-04T09:12:36.205-07:002011-04-04T09:12:36.205-07:00There is an alternative explanation of the data th...There is an alternative explanation of the data that fits more closely with the Acemoglu and Shimer hypothesis: If unemployment insurance is currently 'too low' people with longer unemployment duration become more desperate (as savings are exhausted etc.) and are more willing to take a 'bad' job. <br />If unemployment insurance were extended, then these workers may be able to wait for a 'good' job. <br /><br />Perhaps a good field experiment is in order.Anonymousnoreply@blogger.com