%0 Report
        %A Borgschulte, Mark
%A Martorell, Paco
        %T Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment
        %D 2016
        %8 2016 Jan
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 9680
        %U https://www.iza.org/publications/dp9680
        %X This paper provides revealed-preference estimates of the monetary value of avoiding job search in a high-unemployment labor market by examining the behavior of military servicemembers deciding between reenlisting and exiting the military. We find that servicemembers would sacrifice 1.5-2% in earnings in exchange for avoiding a one percentage point increase in the home-state unemployment rate. Comparing these estimates to realized losses in post-service civilian earnings resulting from exiting the military during times of high unemployment suggests that mitigating factors (e.g., leisure, private and public transfers) offset less than one-third of the earnings losses caused by entering a weak labor market.
        %K labor market entry
%K welfare cost of business cycles
%K military reenlistment