Administrative Costs and Optimal Unemployment Insurance
Nathaniel Pattison
To operate the UI system, state workforce agencies incur roughly $3 billion in administrative costs each year. This paper examines the impact of UI these administrative costs on optimal UI benefit levels. Incorporating administrative expenses into the standard Baily-Chetty framework leads to non-trivial reductions in the optimal replacement rate.
Landlords as Lenders of Last Resort? Missed Housing Payments During Unemployment
Nathaniel Pattison
Revision Requested at Journal of Urban Economics
This paper examines how the option to miss housing payments helps households, especially renters, cope with job loss. While housing is a consumption commitment, meaning it is costly to adjust, housing payments can be considerably more flexible. There are three main results. First, missed payments are common after job loss, and renters' average reduction in housing expenditure is similar to that for nondurables. Second, the large majority of missed payments do not lead to eviction or a forced move, so the reduction in payments is a deferral rather than a step toward losing the home. Third, the resulting arrears are large, often 2 to 3 months of rent, and they accrue to renters who have little liquid wealth and limited access to credit. Missed payments are therefore an informal source of liquidity for households with few alternatives. I then develop a stylized model of rent accommodations that explains why landlords supply this liquidity.
Eligibility Screening and Means Testing in Consumer Bankruptcy
Daniel Millimet, Nathaniel Pattison
Revision Requested at International Economic Review
In the U.S. consumer bankruptcy system, the most important decision a debtor makes is whether to file under Chapter 7 or Chapter 13. This paper investigates the role of eligibility screening by courts in this decision. Despite uniform federal law, we show that different implementation of the law creates unequal access to debt relief across the country.
Previously titled "A Tale of Two Bankruptcies: Geographic Differences in Bankruptcy Chapter Choice"