John Lindner, a Boston College Ph.D. candidate will present his job market talk on the paper, "Biased Beliefs and Job Search: Implications for Optimal Unemployment Insurance." 

Abstract:

Theoretical models of optimal Unemployment Insurance predict that biased beliefs among the unemployed affect their job search and savings behavior. To date, no reliable data have been used to empirically analyze these predictions. In this paper, I use a novel dataset, the Survey of Unemployed Workers in New Jersey, to evaluate how biased beliefs vary across unemployed workers and how they influence the behavior of those workers. I find that overly-optimistic unemployed workers underestimate the duration of their unemployment, leading them to spend 26 percent less time searching for a job each week than those with a pessimistic bias. These results suggest that unemployed workers with an optimistic bias would benefit from an information "nudge" that encourages increased search effort.