Research Discussion Paper – RDP 2021-08 Job Loss, Subjective Expectations and Household Spending

Contents

• Introduction
• Measuring Subjective Employment Expectations and Household Spending
• Can Workers Predict Actual Labour Market Outcomes?
• How Does Unemployment Affect Household Spending?
• Do Expectations Affect the Sensitivity of Household Spending to Unemployment?
• Why Does Unemployment Reduce Spending?
• Sampling Bias in Household Surveys
• Conclusion and Policy Implications
• Appendix A: Testing the Predictive Ability of Workers' Subjective Expectations
• Appendix B: Full Regression Output
• References
• Copyright and Disclaimer Notice

We would like to thank Benjamin Beckers, James Bishop, Iris Chan, Adam Gorajek, James Hansen, Calvin He, Amanda Martz, John Simon and seminar participants at the Reserve Bank of Australia. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely responsible for any errors.