By Dave Anderson:
The first from the San Fransisco Federal Reserve on the impact of added weeks of benefits on the unemployment rate. It is minimal: [h/t Econbrowser]
Although economists have shown that extended availability of UI benefits
will increase unemployment duration, the effect in the latest downturn
appears quite small compared with other determinants of the unemployment
rate. Our analyses suggest that extended UI benefits account for about
0.4 percentage point of the nearly 6 percentage point increase in the
national unemployment rate over the past few years. It is not surprising
that the disincentive effects of UI would loom small in the midst of
the most severe labor market downturn since the Great Depression.
Some conservative economists have argued that unemployment insurance swamps the lack of job availability in this current labor market and that is the reason why unemployment is 9.7% on U-3. The lucky duckies are being coddled.
And now a graph from the Center on Budget Policy and Priorities on the spike of long term unemployment:
Speaking as someone who is in part of this lucky 44% of long term unemployed, there is jack-shit out there.
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