Matthew J. Notowidigdo

Long-Term Unemployment and the Great Recession: The Role of Composition, Duration Dependence, and Nonparticipation

We explore the role of composition, duration dependence, and labor force nonparticipation in accounting for the sharp increase in the incidence of long-term unemployment (LTU) during the Great Recession. We show that compositional shifts account for very little of the observed increase in LTU. Using panel data from the Current Population Survey for 2002–7, we calibrate a matching model that allows for duration dependence in unemployment and transitions between employment, unemployment, and nonparticipation. The calibrated model accounts for almost all of the increase in LTU and much of the observed outward shift in the Beveridge curve between 2008 and 2013.

Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates

We estimate the extent to which legal and administrative fees prevent liquidity-constrained households from declaring bankruptcy. To do so, we study how the 2001 and 2008 tax rebates affected consumer bankruptcy filings. We exploit the randomized timing of the rebate checks and estimate that the rebates caused a significant short-run increase in consumer bankruptcies in both years, with larger effects in 2008 when the rebates were more generous and more widely distributed. Using hand-collected data from individual bankruptcy petitions, we document that households that filed shortly after receiving their rebate checks had higher average liabilities and liabilities-to-income ratios.

Folk computing: revisiting oral tradition as a scaffold for co-present communities

In this paper, we introduce Folk Computing: an approach for using technology to support co-present community building inspired by the concept of folklore. We also introduce a new technology, called “i-balls,” whose design helped fashion this approach. The design of the i-ball environment is explained in terms of our effort to simultaneously preserve what works about folklore while also using technology to expand its power as a medium for community building.

The Economic Consequences of Hospital Admissions

We use an event study approach to examine the economic consequences of hospital admissions for adults in two datasets: survey data from the Health and Retirement Study, and hospitalization data linked to credit reports. For non-elderly adults with health insurance, hospital admissions increase out-of-pocket medical spending, unpaid medical bills and bankruptcy, and reduce earnings, income, access to credit and consumer borrowing. The earnings decline is substantial compared to the out-of-pocket spending increase, and is minimally insured prior to age-eligibility for Social Security Retirement Income. Relative to the insured non-elderly, the uninsured non-elderly experience much larger increases in unpaid medical bills and bankruptcy rates following a hospital admission. Hospital admissions trigger less than 5 percent of all bankruptcies.

Myth and Measurement — The Case of Medical Bankruptcies

Myth and Measurement Though there is compelling evidence that medical expenses do cause bankruptcies in the United States, they may cause far fewer than has been claimed. Overemphasizing such event...