This paper by Walter Nicholson, presented at the American Economic Association's annual meetings in 2001, examines the reemployment bonus experiments from a theoretical microeconomics perspective. The author argues that viewing reemployment bonuses as temporary wage increases provides a more informative approach to understanding their effects on individual labor supply. The paper highlights the following key points: 1. **Conceptualization of Reemployment Bonuses**: The author suggests that reemployment bonuses should be seen as temporary wage increases, which can help interpret the experimental results within the broader literature on labor supply. 2. **Experimental Results**: The experiments showed that the offer of a reemployment bonus reduced weeks of unemployment insurance (UI) collection by 0.3 to 1.1 weeks, depending on the location and specific treatment. Take-up rates were low, and the impact varied by subgroup, with women responding more significantly than men. 3. **Labor Supply Interpretation**: The basic results of the experiments are consistent with a labor supply interpretation, aligning with the disincentive effects of UI benefits. The implied uncompensated wage elasticity of supply is about +0.29, higher than typical estimates but within the range of literature findings for women. 4. **Subgroup Analysis**: The experiments revealed that younger workers and those with lower base earnings were more responsive to the bonus offer, which is consistent with the labor supply interpretation. 5. **Recall Expectations**: The relationship between the bonus offer and recall expectations is complex. While the labor supply interpretation suggests that the bonus should encourage new job-taking and reduce recalls, the experimental data do not provide clear evidence on this point. 6. **Policy Implications**: The paper concludes that a more structural approach to the bonus issue could benefit research by providing better guidance on experimental design, eligibility rules, subgroup analyses, and policy recommendations. Overall, the paper emphasizes the importance of integrating behavioral models with econometric techniques to better understand and interpret the effects of reemployment bonus programs.This paper by Walter Nicholson, presented at the American Economic Association's annual meetings in 2001, examines the reemployment bonus experiments from a theoretical microeconomics perspective. The author argues that viewing reemployment bonuses as temporary wage increases provides a more informative approach to understanding their effects on individual labor supply. The paper highlights the following key points: 1. **Conceptualization of Reemployment Bonuses**: The author suggests that reemployment bonuses should be seen as temporary wage increases, which can help interpret the experimental results within the broader literature on labor supply. 2. **Experimental Results**: The experiments showed that the offer of a reemployment bonus reduced weeks of unemployment insurance (UI) collection by 0.3 to 1.1 weeks, depending on the location and specific treatment. Take-up rates were low, and the impact varied by subgroup, with women responding more significantly than men. 3. **Labor Supply Interpretation**: The basic results of the experiments are consistent with a labor supply interpretation, aligning with the disincentive effects of UI benefits. The implied uncompensated wage elasticity of supply is about +0.29, higher than typical estimates but within the range of literature findings for women. 4. **Subgroup Analysis**: The experiments revealed that younger workers and those with lower base earnings were more responsive to the bonus offer, which is consistent with the labor supply interpretation. 5. **Recall Expectations**: The relationship between the bonus offer and recall expectations is complex. While the labor supply interpretation suggests that the bonus should encourage new job-taking and reduce recalls, the experimental data do not provide clear evidence on this point. 6. **Policy Implications**: The paper concludes that a more structural approach to the bonus issue could benefit research by providing better guidance on experimental design, eligibility rules, subgroup analyses, and policy recommendations. Overall, the paper emphasizes the importance of integrating behavioral models with econometric techniques to better understand and interpret the effects of reemployment bonus programs.