Do wages compensate for risk of unemployment? Parametric and semiparametric evidence from seasonal jobs

Due to unique institutional and technological factors, seasonal agricultura l jobs are characterized by much higher risk of unemployment than similar p ermanent jobs. I estimate compensating differentials for risk of unemployme nt and compare those with unemployment insurance benefits provided by the g overnment. I use two sets of estimators. First, I calculate parametric esti mates with Heckman correction. Second, I compute three versions of a distri bution-free semiparametric estimator which is robust to misspecification of the residual distribution. The main finding of the paper is that there exi sts a positive compensating differential of 15.5% of the average wage. This corresponds to an implicit replacement rate significantly larger than the typical unemployment benefit.