Fortunately for me, I have now entered a state about which my discipline has loads to say: unemployment. Relating theoretical models of unemployment to my own experience has not been difficult. For example, I have occasionally cited insights of search-and-matching models to justify my period of joblessness - reminding friends that in a world where workers and jobs are heterogeneous, the optimal length of search time (unemployment) may be positive. One of these smart-ass friends retorted that my reservation wage was simply too high. To which I say, at least I don't still live with parents! (oh wait...)
Anyhow, thumbing through Romer's Advanced Macroecnomics raised a frightening new possibility - as I succumbing to hysteresis? Romer defines the condition as follows (p. 473):
Situations where one-time disturbances permanently affect the path of the economy are said to exhibit hysteresis. In the context of unemployment, two sources of hysteresis... have received considerable attention. One is deterioration of skills: workers who are unemployed do not acquire additional on-the-job training, and their existing human capital may decay or become obsolete... The second additional source of hysteresis is through labor-force attachment. Workers who are unemployed for extended periods may adjust their standard of living to the lower level provided by income-maintenance programs; in addition, a long period of high unemployment may reduce the social stigma of joblessness. Because of these effects, labor supply may be permanently lower when demand returns to normal.This idea became influential in the early 1980s and has subsequently been used to explain the persistence of high unemployment amid business cycle recoveries, particularly in those countries thought be stricken by Eurosclerosis. With Nicolas Sarkozy now exhorting France to "roll up its sleeves" and "get up early," now is not the time to contract a malady closely associated with lazy Frenchmen. So I wonder - am I exhibiting any symptoms of hysteresis?
- deterioration of skills, lack of on-the-job-training, decay of human capital: Given the monotony of many entry level positions, I can flatter myself into believing that my stock of human capital is holding up at least comparably to how it would be if I had a job. But lack of on-the-job-training is clearly a concern. When everyone else is mastering tricks in Excel, VBA and Matlab... I'm trying to convince a Time Warner guy that crawling beneath my floor really won't be that uncomfortable. I've also made no progress in developing the skill that strikes me as most important for entry-level work: how to appear busy without actually working.
- Adjusting my standard of living to a lower level provided by income-maintenance programs: Ha! Most adjustments to my standard of living have been upward, baby. Who in the working world can spend twenty minutes at Yura deciding what to eat for lunch? I have begun taking the bus far more, but given the price of cabs in new york, this is probably a habit to be welcomed rather than a lapse to be denigrated.
- Reducing the social stigma of extended joblessness: Here's where the real fear lies. I would not yet consider my time of leisure to be "extended," but the embarrassment from being a bum does diminish over time. You never relish the question of "what do you do?" circulating around the table, but after a few times you realize that "nothing" isn't an answer that warrants immediate ostracizing. Some people become noticeably less interested, others don't, but usually the conversation drifts to greener pastures.
No comments:
Post a Comment