Main takeaway: UI generosity modestly raises reservation & reemployment wages, but much of action is in increased collection of UI. This take-up margin dampens wage response. Policy levers on eligibility and costs of claiming and collecting UI benefits important, and interact with benefit levels.

We build a directed search model with endogenous take-up. Key insight: Higher generosity draws in lower-wage claimants, dampening the average wage response. In the absence of a collection margin, the wage response is stronger.

From CPS: • Reemployment wage premium for UI-eligible ≈ +9% vs. ineligible during expansions. • Take-up rate jumped from ~30% to ~40%, entirely due to higher benefits — not from changes in composition of unemployed or eligibles.

From BAM data we find: • Cross-section elasticity of reservation wages to UI is very small • Pandemic expansions raised reservation wages by only 8–12%. • Composition shifts: Relative to pre-pandemic, collectors were younger, nonwhite, and leisure/hospitality workers.

During COVID, UI generosity increased significantly ($600/$300 weekly supplements, plus expanded eligibility). A natural experiment to measure the pass-through from benefits to wages and who collects UI.

How do more generous unemployment benefits affect job search, reemployment wages, and the decision to claim UI benefits? We study this using detailed admin & survey data from BAM and CPS — and a directed search model with UI and endogenous take-up.

ROFL = Real Outliers Fatally Lanced
TLDR = Too Lazy; Didn't Research
SMH = So Many Hypotheses
BRB = Bayes ... Really, Bayes?
IMHO = Is My Hypothesis Obvious?
DND = Distribution Not Defined
FAFO = Fanciful Analysis of Four Observations
JC = Jointly Comical
NFI = Never Forget Independence

The work is mysterious and important.