Saturday, October 13, 2007

Higher Unemployment Benefits-Higher Unemployment

New study confirms the obvious-if you subsidize unemployment more then you will have more unemployment. The authors evaluate recent Finnish experience after they in 2003 raised short-term unemployment benefits for the first 150 days of unemployment. The result was that the duration of unemployment for those receiving the higher benefits rose significantly even as it actually fell for those not eligible for the increased benefits. The authors estimate that the 15% increase caused a 31 day increase in umeployment duration.

Not exactly shocking results, but when Social Democrats try to deny the obvious truth such studies can be valuable.


Anonymous pinus said...

"The authors estimate that the 15% increase caused a 31 day increase in umeployment duration."

This is not necessarily a bad thing. Maybe people just had more time to find a better match. Depends on which groups this increase concerns, and what is the true reason for the increase. But to find this out, you'd need a much deeper analysis of the impacts on efficiency (admittedly, such a study is difficult to perform).

9:52 PM  
Blogger David said...

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5:59 AM  

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