Faculty & Research

Matthew J. Notowidigdo

Neubauer Family Assistant Professor of Economics

Address :
5807 South Woodlawn Avenue
Chicago, IL 60637

Matthew J. Notowidigdo studies labor economics, public finance, and health economics. His dissertation studies the economics of local labor markets, focusing on how social insurance and housing prices affect the incentives to migrate following local labor demand shocks. His recent work explores on how employers evaluate workers with long unemployment spells. His recent papers include “Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments” (written jointly with Jon Guryan and Kory Kroft) was published in the American Economic Journal: Applied Economics in 2009 and his paper “Health Insurance and the Consumer Bankruptcy Decision: Evidence from Medicaid” (written jointly with Tal Gross) was published in the Journal of Public Economics in 2011.

Outside of academia, Notowidigdo has corporate experience as an associate at Lehman Brothers in the Fixed Income Division, and he has consulted for several professional sports teams on ticket pricing. Within academia he has teaching experience at both the undergraduate and graduate level, and he was honored with the distinction of the Carleton E. Tucker Award for Teaching Excellence in 2004.

Notowidigdo studied at the Massachusetts Institute of Technology before joining Chicago Booth in 2010. He holds a BS in economics, a BS in computer engineering, a MEng in computer science, and a PhD in economics. He is currently a Faculty Research Fellow at the National Bureau of Economics Research.

 

2013 - 2014 Course Schedule

Number Name Quarter
33001 Microeconomics 2013 (Fall)

Other Interests

Sports economics, music, golf.

 

Research Activities

Labor economics, public finance, health economics.

With Amy Finkelstein and Erzo Luttmer, “What Good is Wealth Without Health? The Effect of Health on the Marginal Utility of Consumption,” Journal of the European Economic Association (forthcoming).

With Daron Acemoglu and Amy Finkelstein, “Income and Health Spending: Evidence from Oil Price Shocks,” Review of Economics and Statistics (forthcoming).

With Tal Gross, “Health Insurance and the Consumer Bankruptcy Decision: Evidence from Medicaid,” Journal of Public Economics (2011).

With Jon Guryan and Kory Kroft, “Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments,” American Economic Journal: Applied Economics (2009).

With Amy Finkelstein and Erzo Luttmer, “Approaches to Estimating the Health State Dependence of the Utility Function,” American Economic Review, Papers and Proceedings (2009).

New: Manufacturing Decline, Housing Booms, and Non-Employment
Date Posted: Jun  04, 2013
We exploit cross-city variation in manufacturing decline and housing market changes during the 2000s, and jointly estimate their effects on non-employment. Both forces strongly affected non- employment between 2000 and 2007, with the increase from manufacturing decline almost exactly offset by reductions attributable to housing. We show that this offsetting occurred both in the aggregate and at the individual level. Moreover, we show that the housing bust undid the effects of the preceding housi

New: Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment
Date Posted: Jun  04, 2013
This paper studies the role of employer behavior in generating “negative duration dependence” - the adverse effect of a longer unemployment spell - by sending fictitious resumes to real job postings in 100 U.S. cities. Our results indicate that the likelihood of receiving a callback for an interview significantly decreases with the length of a worker’s unemployment spell, with the majority of this decline occurring during the first eight months. We explore how this effect varies with local

REVISION: Liquidity Constraints and Consumer Bankruptcy: Evidence from Tax Rebates
Date Posted: May  10, 2012
This paper estimates the extent to which legal fees prevent liquidity-constrained households from declaring bankruptcy. To do so, it studies how the 2001 and 2008 income tax rebates affected consumer bankruptcy filings. We exploit the randomized timing of the rebate checks and estimate that the rebates caused a significant, short-run increase in consumer bankruptcies in both years, with larger effects in 2008 when the rebates were more generous and more widely distributed. Using hand-collected

New: What Good is Wealth Without Health? The Effect of Health on the Marginal Utility of Consumption
Date Posted: Jul  14, 2009
We estimate how the marginal utility of consumption varies with health. To do so, we develop a simple model in which the impact of health on the marginal utility of consumption can be estimated from data on permanent income, health, and utility proxies. We estimate the model using the Health and Retirement Study’s panel data on the elderly and near-elderly, and proxy for utility with measures of subjective well-being. We find robust evidence that the marginal utility of consumption declines as h

New: Income and Health Spending: Evidence from Oil Price Shocks
Date Posted: May  19, 2009
Health expenditures as a share of GDP have more than tripled over the last half century. A common conjecture is that this is primarily a consequence of rising real per capita income, which more than doubled over the same period. We investigate this hypothesis empirically by instrumenting for local area income with time-series variation in global oil prices between 1970 and 1990 interacted with cross-sectional variation in the oil reserves across different areas of the Southern United States. Thi

New: Income and Health Spending: Evidence from Oil Price Shocks
Date Posted: Feb  25, 2009
Health expenditures as a share of GDP have more than tripled over the last half century. A common conjecture is that this is primarily a consequence of rising real per capita income, which more than doubled over the same period. We investigate this hypothesis empirically by instrumenting for local area income with time-series variation in global oil prices between 1970 and 1990 interacted with cross-sectional variation in the oil reserves across different areas of the Southern United States. Thi

New: Approaches to Estimating the Health State Dependence of the Utility Function
Date Posted: Jan  19, 2009
If the marginal utility of consumption depends on health status, this will affect the economic analysis of a number of central problems in public finance, including the optimal structure of health insurance and optimal life cycle savings. In this paper, we describe the promises and challenges of various approaches to estimating the effect of health on the marginal utility of consumption. Our basic conclusion is that while none of these approaches is a panacea, many offer the potential to shed im

New: Approaches to Estimating the Health State Dependence of the Utility Function
Date Posted: Jan  14, 2009
If the marginal utility of consumption depends on health status, this will affect the economic analysis of a number of central problems in public finance, including the optimal structure of health insurance and optimal life cycle savings. In this paper, we describe the promises and challenges of various approaches to estimating the effect of health on the marginal utility of consumption. Our basic conclusion is that while none of these approaches is a panacea, many offer the potential to shed i

New: Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments
Date Posted: Nov  12, 2007
This paper uses the random assignment of playing partners in professional golf tournaments to test for peer effects in the workplace. We find no evidence that the ability of playing partners affects the performance of professional golfers, contrary to recent evidence on peer effects in the workplace from laboratory experiments, grocery scanners, and soft-fruit pickers. In our preferred specification, we can rule out peer effects larger than 0.045 strokes for a one stroke increase in playing part


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