Public policy should be leery of anything that discourages this churning in the job market. (Otherwise, four out of 10 of all Americans would still be working on a farm, as we were a century ago.) Because unemployment benefits essentially subsidize unemployment, they can have this effect, encouraging people to stay unemployed instead of jumping back into the job market.
One study shows that each additional week of unemployment benefits increases the time a person spends unemployed by a day. Indeed, the unemployed are twice as likely to find a job in the week before their benefits expire than in the weeks prior. Makes you go, "huh," doesn't it?
People respond to incentives. Experiments in a few states have shown that giving a re-employment bonus to the unemployed speeds up the time it takes them to find a new job by roughly a week. Europe has longer and more generous unemployment benefits than the United States -- and also chronically higher rates of unemployment.
So, as the economy begins to purr and the unemployment rate dips, the last thing the government should do is give people a disincentive to join in the great roiling American job market. Opposing an extension of unemployment benefits isn't heartless, but an act of well-placed faith -- in the dynamism of the American economy and in the resourcefulness of its workers.
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