This paper presents new tests of the permanent income hypothesis and other widely used models of household behavior using data from the labor market. We estimate the "excess sensitivity" of job search behavior to cash-on-hand using sharp discontinuities in eligibility for severance pay and extended unemployment insurance (UI) bene...ts in Austria. Analyzing data for over one-half million job losers, we obtain three empirical results: (1) a lump-sum severance payment equal to two months of

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... gs reduces the job-...nding rate by 8-12% on average; (2) an extension of the potential duration of UI bene...ts from 20 weeks to 30 weeks similarly lowers job-...nding rates in the ...rst 20 weeks of search by 5-9%; and (3) increases in the duration of search induced by the two programs have little or no e¤ect on subsequent job match quality. Using a search theoretic model, we show that estimates of the relative e¤ect of severance pay and extended bene...ts can be used to calibrate and test a wide set of intertemporal models. Our estimates of this ratio are inconsistent with the predictions of a standard permanent income model, as well as naive "rule of thumb"behavior. The representative job searcher in our data is 70% of the way between the permanent income benchmark and credit-constrained behavior in terms of sensitivity to cash-on-hand.