Academic Literature

Unemployment Insurance / Reduces labor force exit among the unemployed rather than changes reemployment rates

A paper by Jesse Rothstein, a professor of public policy and economics from the University of California Berkeley has made making a lot of noice on the Web.

Jesse Rothstein who is also former chief economist at the Department of Labor, provides up-to-date estimates of the ‘generousity’ effect of unemployment insurance benefits (in terms of duration, % of wages replaced, or coverage) which provide a disincentive for the unemployed to look for work and thus, increase the unemployment rate instead of contributing to lower it.

“Nearly two years after the official end of the ‘Great Recession’, the labor market remains historically weak. Many commentators have attributed the ongoing weakness in part to supply-side effects driven by dramatic expansions of Unemployment Insurance (UI) benefit durations, to as many as 99 weeks” writes Rothstein in Unemployment Insurance and Job Search in the Great Recession on brookings.edu.

His “paper investigates the effect of these UI extensions on job search and reemployment. His results: “UI extensions had significant but small negative effects on the probability that the eligible unemployed would exit unemploymentconcentrated among the long-term unemployed. The estimates imply that UI benefit extensions raised the unemployment rate by only about 0.2–0.6 percentage points, much less than is implied by previous analyses. Half or more of this effect is due to reduced labor force exit among the unemployed rather than to the changes in reemployment rates that are of greater policy concern; some analyses even suggest that UI extensions, by keeping displaced workers in the labor market, may have increased the share who were later reemployed “

 

Source & details @: 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Jobs – Offres d’emploi – US & Canada (Eng. & Fr.)

The Most Popular Job Search Tools

Even More Objectives Statements to customize

Cover Letters – Tools, Tips and Free Cover Letter Templates for Microsoft Office

Follow Job Market Monitor on WordPress.com

Enter your email address to follow this blog and receive notifications of new posts by email.

Follow Job Market Monitor via Twitter

Categories

Archives

%d bloggers like this: