Unemployment, Manufacturing Decline, and Rising Healthcare Cost: Interview with Matthew Notowidigdo

What causes enduring unemployment? What are the impacts of housing booms and manufacturing decline on employment growth? How can we come up with potential solutions for rising healthcare costs? How should we reconcile normative judgments and empirical analysis in debates about issues like unemployment and healthcare? An applied microeconomist, Prof. Matthew Notowidigdo studies a broad set of topics in labor and health economics using a variety of empirical approaches. In labor economics, his research has focused on understanding the causes and consequences of unemployment duration dependence (state dependence in unemployment), the incidence of local labor demand shocks, and the economic effects of unemployment insurance over the business cycle. One theme across all of these topics is using variation in local labor market conditions to inform economic theories and learn new facts about the labor market. Prof. Notowidigdo’s research in health economics focuses on the effects of public health insurance on labor supply, the effects of health on the marginal utility of consumption, and the effects of income on health spending. An important motivation for this line of research is to inform the design of public health insurance programs. Notowidigdo is a co-editor at the American Economic Journal: Economic Policy, an associate editor at the Quarterly Journal of Economics, and a faculty research fellow at the National Bureau of Economics Research (NBER). His co-authored paper that was published in the Journal of the European Economic Association, “What Good is Wealth without Health? The Effect of Health on the Marginal Utility of Consumption," won the association's 2014 Hicks-Tinbergen Medal, awarded to the most outstanding article published in the last two years. Before coming to Northwestern, Notowidigdo was the Neubauer Family Assistant Professor of Economics at the University of Chicago Booth School of Business.