Study finds Unemployment Insurnace(UI) had little to no impact on job finding, contradicting the theory that unemployment benefits incentivize people to stay unemployed and also suggests that temporary benefit supplements are a promising tool for countering economic downturns.

https://www.aeaweb.org/articles?id=10.1257/aer.20220973

created by BlitzOrion on 04/12/2024 at 16:00 UTC

1593 upvotes, 16 top-level comments (showing 16)

Comments

Comment by AutoModerator at 04/12/2024 at 16:00 UTC

1 upvotes, 0 direct replies

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Comment by Shibotu at 04/12/2024 at 16:14 UTC

422 upvotes, 2 direct replies

Research shows that job hunting is more successful when candidates can continue eating and sleeping indoors.

Comment by arcaias at 04/12/2024 at 16:27 UTC*

150 upvotes, 0 direct replies

It in fact encourages people to get higher quality jobs (which can have a positive impact on one's quality of life, productivity, and income) instead of desperately taking terrible jobs while wasting time letting their actual job skills decline and become less relevant...

Which in turns helps wealthy people become more wealthy since that working person is happier and therefore a better worker...

But that kind of investment would take forethought that nepotism just does not provide...

Comment by the_red_scimitar at 04/12/2024 at 17:03 UTC

36 upvotes, 0 direct replies

Come on - handouts are for billionaires and huge corporations.

Comment by TeishAH at 04/12/2024 at 16:24 UTC

37 upvotes, 5 direct replies

Here in Canada it’s only 55% of your previous income, so yes it’s not gonna be enough to last on and it only lasts a year I believe.

Comment by hobopwnzor at 04/12/2024 at 20:21 UTC

6 upvotes, 0 direct replies

When I got fired during the regional bank crisis because of layoffs I had to live on $300 a month unemployment.

Which meant the first job that came along i took.

I'd have liked to wait and taken a higher paying job in management but I couldn't.

Nobody is falling over themselves to stay unemployed and making 60% of their old wage.

Comment by DaisiesSunshine76 at 04/12/2024 at 17:43 UTC

5 upvotes, 1 direct replies

It's certainly not enough money to live off of for most people. Just like those stimulus checks, but all the Republicans were saying that they were encouraging people to not work.

Comment by BrtFrkwr at 04/12/2024 at 16:42 UTC

8 upvotes, 0 direct replies

People will believe donald trump instead.

Comment by EconomistWithaD at 04/12/2024 at 16:20 UTC

3 upvotes, 1 direct replies

1.

Ungated version. https://www.nber.org/system/files/working_papers/w30315/w30315.pdf

2. They still find canonical “UI reduces job search” behavior. The $600 supplement increased unemployment duration by 6-11%, while the $309 supplement increased unemployment duration by 5-11%.

They do note, however, that these are in line with OTHER periods, so that expanded UI did not appreciably expand unemployment duration.

3. This moderate disincentive impact on unemployment duration has been found in other studies. HOWEVER, some studies (4th link below) have found pretty significant impacts on employment from the CARES Act, so there can still be debate on the magnitude.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3870185

https://cepr.org/system/files/publication-files/101416-covid_economics_issue_64.pdf#page=191

https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3673321[1] (bigger impact in sectors where work couldn’t be done remotely).

1: https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3673321

https://onlinelibrary.wiley.com/doi/abs/10.1111/ecin.13180

4. One concern with the analyses (hard to disentangle, may not matter, and doesn’t diminish these results) is the flow OUT of the labor force. The CARES Act may have allowed parents some ability to move out of the labor force (they wouldn’t be captured in these outcomes, then) as childcare availability decreases.

Comment by sequoiachieftain at 04/12/2024 at 16:20 UTC

4 upvotes, 2 direct replies

It can take months to start seeing unemployment money. Somehow people that write these articles are unaware of that fact.

Comment by smrt109 at 04/12/2024 at 16:11 UTC

0 upvotes, 0 direct replies

Can't help but laugh at them calling that drivel a theory

Comment by Appex92 at 05/12/2024 at 01:35 UTC

1 upvotes, 0 direct replies

The argument that UBI will make the whole of society doing nothing and just living off of it is absurd. That's like saying if we gave everyone federal minimum wage with no work, that people would be happy with that. Sure, homeless people that never want to work will be happy, and people that lost their job will be temporarily happy knowing they have that little cushion. But tell me one person that is actually motivated that would be fine doing nothing and cruising along with just enough to live. Almost no one, most people want things, whether it be emotional, experiential, or material; and all of that costs money, and more than you make just to survive. It would just give people a tiny cushion, not an incentive not to work and actually achieve their goals and prosperity however they define it as such.

Comment by Eplitetrix at 04/12/2024 at 17:01 UTC

-5 upvotes, 2 direct replies

The only time I was on unemployment my whole life I woke up naturally with no alarm clock, played video games for hours, smoked pot as much as I wanted, and went to interviews the whole time hoping I didn't get the job. When my benefits were two weeks from expiring, I went and got a job.

I'm normally a very hard worker and was solid at my job before the unemployment. Post that unemployment, I've been employed for 15 years without a break. I felt the psychological reality of not having to work while still being paid, and I loved it.

No study is going to tell me not to believe my own lying eyes.

Comment by whit9-9 at 04/12/2024 at 19:43 UTC

0 upvotes, 0 direct replies

How many studies have been done on this subject? Because i honestly can't remember one.

Comment by milkgoddaidan at 04/12/2024 at 17:53 UTC

-5 upvotes, 1 direct replies

"We show that the largest increase in unemployment benefits in US history had large spending impacts and small job-finding impacts."

So spending more on unemployment benefits didn't incentivize people to stay unemployed, but it also didn't incentivize them to find a job more often.

That seems like it directly suggests we don't need that increased unemployment benefit, as it isn't helping people find a new job. Perhaps we need an even larger unemployment benefit, perhaps we need a smaller one to save on spending if there isn't a measurable effect.

Comment by Nu11us at 04/12/2024 at 16:36 UTC

-5 upvotes, 1 direct replies

"The small job-finding effects were driven in part by the fact that supplements were temporary and implemented in an environment with an already depressed job-finding rate. The large spending effects were driven in part by the fact that they were targeted towards households with high spending propensities."

It seems like a lot of what the paper is really saying is that job-finding rates were only slightly depressed while spending was greatly increase, i.e., people bought a lot of stuff with government money.