Friday, December 12, 2008

Does extended Unemployment Insurance increase the Unemployment Rate?

There are several academics, economists, bloggers, and think-tanks out there that believe that the extending the duration of unemployment insurance pay-outs actually increases the the unemployment rate and the average duration of unemployment.

You can read some of their viewpoints at:
The basic point is that if you look at when people tend to find work, there's a big jump up in people finding work near the time when their unemployment insurance is set to expire.

And companies have an incentive to scale back labor expense by lay-offs and then hiring back the workers near the time of expiration of Unemployment benefits as a cheaper way of managing their business during slowing economic times.

1 comment:

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