Pay For Unemployment—Get More Unemployment

https://grantcoulson.files.wordpress.com/2014/04/incentiveseverywherepicturecorrect1.jpg?w=444&h=288

       Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

    Wherein we see that paying for unemployment produces more of it. Thanks to Marginalrevolution.com. Incentives are everywhere. This is the abstract.

“The Impact of Unemployment Bene We measure the effect of unemployment benefit duration on employment. We exploit the variation induced by the decision of Congress in December 2013 not to reauthorize the unprecedented benefit extensions introduced during the Great Recession. Federal benefit extensions that ranged from 0 to 47 weeks across U.S. states at the beginning
of December 2013 were abruptly cut to zero. To achieve identification we use the fact
that this policy change was exogenous to cross-sectional differences across U.S. states
and we exploit a policy discontinuity at state borders. We find that a 1% drop in benefit
duration leads to a statistically significant increase of employment by 0.0161 log points.
In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost
1 million of these jobs were filled by workers from out of the labor force who would not
have participated in the labor market had benefit extensions been reauthorized.”

    This also works for emotional incapacitance, and especially for pensions based on “back problems.”

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “
Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

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