Does unemployment insurance (UI) incentivise unemployment?

[Obamacult]

To quote Maggie, "socialism is great until you run out of other people's money"

I don't think either you or her know what that word means.

Let me correct for your benefit

" Of the Free socialist territories" ideology of choice is great until you run out of other people's money"

[Tsuntion]

I mean, again, the problem is, the wording is wrong, UI doesn't incentivise "UNEMPLOYMENT" because unemployment is the state of being able, available, and actively seeking employment but unable to obtain suitable work.

It doesn't.

Virtually nobody on UI when offered a suitable job turns it down. And, in fact, doing so is grounds for revocation of unemployment benefits.

People do turn down unsuitable work. And that's fine. We don't want people doing jobs that are below them. All it does is create downward pressures.

Bullshit.

You didn't read the research did you?

A recurring current within much of the research (either for or against UI) is the increased likelihood that those receiving benefits will more aggressively seek and find employment the closer the time benefits expire.

That sounds logical, and it is, but why I am convinced that facts and logic don't matter to certain ideologues?

Um, yes. Because the qualified accountant is no longer seeking a job as an accountant; they're seeking any and every grocery bagger job available.

We don't want them to end up bagging groceries in a supermarket, so they are given unemployment benefits for a while so that they can hold out for a good job that will benefit the economy. If their unemployment benefits are going to run out, however, they start seeking other jobs because they have to live, and yes they're more likely to end up employed but their job is not as good or beneficial. Being more desperate when benefits are running out doesn't mean they've been lazy whilst they were still there.

Do you read a single word Neo Art and CTOAN post?

[Obamacult]

This is a typical example of the way progressives conduct business.

They call it politics, but free and peaceful people call it extortion.

For example, progressive can't get what they want in a free, competitive, voluntary and peaceful society so.....

they form a duopoly with govt. to coercive others to bend to their will.

In this case, politicians buy votes from lower income voters in a quid pro quo for preferential labor regulations and UI handouts taken from taxpayers (libertarian and conservative voters). Essentially, this is tyranny of the majority -- you buy votes for handouts gained at the point of a gun.

The problem is when this destructive scheme disincentivises merit and incentivises sloth -- thereby creating a dysfunctional society in economic decline.

Sound familiar?

To quote Maggie, "socialism is great until you run out of other people's money"

oddly enough I would much rather live in a country where votes are "bought" by making sure that we have a strong prosperous middle class than a country were votes are "bought" by making sure that the 1% pay low taxes.

How about living in a nation where the federal govt. doesn't game the system to the benefit of special interest voters and campaign contributors ?

Wouldn't it be better to live in a nation based on merit within a free, voluntary, peaceful and competitive society in which the govt. enforces and protects life, liberty, private property and enforces legal contracts without being corrupted and distracted by managing economic affairs best left to the states or individual citizen?

[Grave_n_idle]

Does unemployment insurance (UI) incentivise unemployment?

Unemployment doesn't need incentivisation.

Unemployment isn't a value in it's own right, it's an absence of employment.

[Cannot think of a name]

Experience has taught me that I cannot expect a reciprocal level of fair brokerage to warrant going through the sources in detail in this particular instance, but I will give an over view of the reading so far.

First of all is to acknowledge the smoke screen. Three of these are studies and equal over 200 to 300 page studies. I am not reading that much and I suspect neither has the OP. What is expected is that we read the abstract and take it at face value as the OP has or be accused of being 'afraid of the facts.' While not being a particular honest tactic, it is effective on open forums such as these. I in fact expect to be lambasted for even suggesting such as a way to dodge facts.

From there the argument is nothing more than 'Oh yeah?' 'Yeah!'. Rather than participate, search for Rabbit Seasonings, at least that one is funny.

The last two or three, I lost a little track, are actually self referential. That is, the quoted relevant part deal with the same study that was so delightfully included because of the author being an Obama and Clinton appointee.

But the real delight is that the study does not actually suggest the OP's premise, the underlying one anyway. What it suggests, which will become a theme, is that unemployment is optimal just where it is. From the OPs sources we learn that unemployment insurance is about half of the wages the person was receiving, and the OP's prize study shows that this is, in fact, optimal. The sticking point, the smoking gun that the OP thinks he's found is that UI allows people to hold out for jobs closer to the wage they left.

Let's say that again: Unemployment insurance allows people to hold out for a wage closer to the one they left.

Read that again. That's right. The OP has presented us with a 'smoking gun' study to demonstrate to us that Unemployment Insurance functions as intended. That unemployment is kept from severely suppressing wages.

Wow. Well, we must act immediately on this entirely intended consequence. What kind of monster would want that?

The source that doesn't circle around to these studies that show that unemployment insurance does what it's supposed to is one that presents a fantasy case instead:

This apparently assumes that everyone lives at 45% of their means and when provided with a few months of that wage, well...party time.

Unlike the studies included, this is just the reasoning the author comes up with. You know, like someone trying to guess why Bronies like MLP or rabid Windows users prescribing motives to Apple users.

And about as useful.

So, thank you OP, for confirming that UI is an essential program that is apparently operated at an optimal level.

Economic reality exposes and debunks your progressive rant.

For example, when labor compensation is based on how many special interest votes you bring to the table the first Tuesday in November -- economic reality and thus economic sustainability, growth and living standards take a back seat.

You can't legislate pay without breeding corruption and cronyism in politics.

Essentially what you advocate is a govt. that can and will be bought for political favors -- in this case, a quid pro quo of votes for plunder or theft at the point of a gun.

Eventually, this kind of criminal enterprise either leaves its citizens destitute or citizens simply leave for more rational and moral states.

Moreover, the most effective social tool known to mankind is a private sector job.

The most effective safety net known to mankind has been and always will be the family.

Yet disturbingly, progressives seek to undermine both under the illusion that their self-serving politically corrupt policies can deliver the poor from poverty.

A look at the recent record of progressive dogma provides a more accurate answer to this myth:

record debt increases,
anemic growth rate,
wage stagnation,
increased income inequality,
long term unemployment at decade high levels,
poverty at decade high levels,
food stamps at record levels,
welfare recipients at record levels,
surging education costs,
surging energy costs,
surging food costs,
high wage jobs replaced with low wage jobs,
increase in Americans rejecting citizenship,
local and state govt. cutting jobs and services,
labor participation rate at decade low levels.

the list goes on and on.......

When your sources say the exact opposite of what you wished they said, return to idealistic screed!

I kind of like the bit of projection at the beginning, too. Nice touch.

[Ashmoria]

oddly enough I would much rather live in a country where votes are "bought" by making sure that we have a strong prosperous middle class than a country were votes are "bought" by making sure that the 1% pay low taxes.

How about living in a nation where the federal govt. doesn't game the system to the benefit of special interest voters and campaign contributors ?

Wouldn't it be better to live in a nation based on merit within a free, voluntary, peaceful and competitive society in which the govt. enforces and protects life, liberty, private property and enforces legal contracts without being corrupted and distracted by managing economic affairs best left to the states or individual citizen?

no we tried that bullshit in the past and it turned out to be not so good for anyone. ill take American socialism over a powerless government any day.

[Obamacult]

Bullshit.

You didn't read the research did you?

A recurring current within much of the research (either for or against UI) is the increased likelihood that those receiving benefits will more aggressively seek and find employment the closer the time benefits expire.

That sounds logical, and it is, but why I am convinced that facts and logic don't matter to certain ideologues?

Um, yes. Because the qualified accountant is no longer seeking a job as an accountant; they're seeking any and every grocery bagger job available.

We don't want them to end up bagging groceries in a supermarket, so they are given unemployment benefits for a while so that they can hold out for a good job that will benefit the economy. If their unemployment benefits are going to run out, however, they start seeking other jobs because they have to live, and yes they're more likely to end up employed but their job is not as good or beneficial. Being more desperate when benefits are running out doesn't mean they've been lazy whilst they were still there.

Do you read a single word Neo Art and CTOAN post?

Maybe there is an economically sound and rational reason why there are no longer high paying jobs for qualified accountants, assembly line workers, glass blowers, blacksmiths, tanners, etc.

Hence, don't you see that when govt. becomes the pay police in a quid pro quo for votes and bribes that economic reality takes a back seat to political patronage and lobbying?

At least until society collapses under the weight of years of political corruption waste and inefficiency.

[Cannot think of a name]

You didn't read the research did you?

Neither did you.

[The Black Forrest]

How about living in a nation where the federal govt. doesn't game the system to the benefit of special interest voters and campaign contributors ?

Wouldn't it be better to live in a nation based on merit within a free, voluntary, peaceful and competitive society in which the govt. enforces and protects life, liberty, private property and enforces legal contracts without being corrupted and distracted by managing economic affairs best left to the states or individual citizen?

no we tried that bullshit in the past and it turned out to be not so good for anyone. ill take American socialism over a powerless government any day.

Why do you hate the free market fairies and the charity fairies?

[Ceannairceach]

You didn't read the research did you?

Neither did you.

Heh, was waiting for someone to say that.

[Obamacult]

Economic reality exposes and debunks your progressive rant.

For example, when labor compensation is based on how many special interest votes you bring to the table the first Tuesday in November -- economic reality and thus economic sustainability, growth and living standards take a back seat.

You can't legislate pay without breeding corruption and cronyism in politics.

Essentially what you advocate is a govt. that can and will be bought for political favors -- in this case, a quid pro quo of votes for plunder or theft at the point of a gun.

Eventually, this kind of criminal enterprise either leaves its citizens destitute or citizens simply leave for more rational and moral states.

Moreover, the most effective social tool known to mankind is a private sector job.

The most effective safety net known to mankind has been and always will be the family.

Yet disturbingly, progressives seek to undermine both under the illusion that their self-serving politically corrupt policies can deliver the poor from poverty.

A look at the recent record of progressive dogma provides a more accurate answer to this myth:

record debt increases,
anemic growth rate,
wage stagnation,
increased income inequality,
long term unemployment at decade high levels,
poverty at decade high levels,
food stamps at record levels,
welfare recipients at record levels,
surging education costs,
surging energy costs,
surging food costs,
high wage jobs replaced with low wage jobs,
increase in Americans rejecting citizenship,
local and state govt. cutting jobs and services,
labor participation rate at decade low levels.

the list goes on and on.......

When your sources say the exact opposite of what you wished they said, return to idealistic screed!

I kind of like the bit of projection at the beginning, too. Nice touch.

Let me post the finding again for your benefit:

The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications.

Higher IU benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.

I find that UI benefit extensions have raised the male unemployment rate by around 1.2 percentage points.

We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%.

[url=http://ftp.iza.org/dp3667.pdf] across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits

First, I find that increases in benefits have much larger effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations substantially among constrained households.

And this one is hilarious because it is from Obama’s former economic advisor Larry Summers. government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work and if you have read this far, give yourself a sheckel for not being a progressive drone who is too closed minded to read research undermining their worldview. Each unemployed person has a “reservation wage”—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.

Now please tell me where in this research it states that UI increases employment?

[Cannot think of a name]

Maybe there is an economically sound and rational reason why there are no longer high paying jobs for qualified accountants, assembly line workers, glass blowers, blacksmiths, tanners, etc.

Maybe dragons took their jobs. Maybe unicorns only hid their jobs because unicorns are dicks. Maybe 'jobs' is only an illusion created by a drug addled infant pachyderm. Fuck dude, if we're in 'maybe' land, don't hold back.

[Cannot think of a name]

When your sources say the exact opposite of what you wished they said, return to idealistic screed!

I kind of like the bit of projection at the beginning, too. Nice touch.

Let me post the finding again for your benefit:

The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications.

Higher IU benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.

I find that UI benefit extensions have raised the male unemployment rate by around 1.2 percentage points.

We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%.

[url=http://ftp.iza.org/dp3667.pdf] across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits

First, I find that increases in benefits have much larger effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations substantially among constrained households.

And this one is hilarious because it is from Obama’s former economic advisor Larry Summers. government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work and if you have read this far, give yourself a sheckel for not being a progressive drone who is too closed minded to read research undermining their worldview. Each unemployed person has a “reservation wage”—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.

Now please tell me where in this research it states that UI increases employment?

Should I just repost the response I've already made directly addressing the sources you provided but clearly didn't understand?

What did you hope to accomplish with this? Are you just kicking up dust?

EDIT: Wait a second, didn't I predict this exact thing happening?

First of all is to acknowledge the smoke screen. Three of these are studies and equal over 200 to 300 page studies. I am not reading that much and I suspect neither has the OP. What is expected is that we read the abstract and take it at face value as the OP has or be accused of being 'afraid of the facts.' While not being a particular honest tactic, it is effective on open forums such as these. I in fact expect to be lambasted for even suggesting such as a way to dodge facts.

From there the argument is nothing more than 'Oh yeah?' 'Yeah!'. Rather than participate, search for Rabbit Seasonings, at least that one is funny.

Well, I should follow my own advice...

[Frisivisia]

Is the Space Pope a mammal?

[The Black Forrest]

When your sources say the exact opposite of what you wished they said, return to idealistic screed!

I kind of like the bit of projection at the beginning, too. Nice touch.

Let me post the finding again for your benefit:

The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications.

Higher IU benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.

I find that UI benefit extensions have raised the male unemployment rate by around 1.2 percentage points.

We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%.

[url=http://ftp.iza.org/dp3667.pdf] across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits

First, I find that increases in benefits have much larger effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations substantially among constrained households.

And this one is hilarious because it is from Obama’s former economic advisor Larry Summers. government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work and if you have read this far, give yourself a sheckel for not being a progressive drone who is too closed minded to read research undermining their worldview. Each unemployed person has a “reservation wage”—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.

Now please tell me where in this research it states that UI increases employment?

Have you even read your sources? Or should I say understand them?

[Caninope]

No.

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

[Cannot think of a name]

No.

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

It's a trap!

[Obamacult]

no we tried that bullshit in the past and it turned out to be not so good for anyone. ill take American socialism over a powerless government any day.

Why do you hate the free market fairies and the charity fairies?

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

[Choronzon]

No.

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

shut up with your lies liberal.

[Greed and Death]

The empirical research:

The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications.

Higher IU benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.

I find that UI benefit extensions have raised the male unemployment rate by around 1.2 percentage points.

We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%.

[url=http://ftp.iza.org/dp3667.pdf] across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits

First, I find that increases in benefits have much larger effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations substantially among constrained households.

And this one is hilarious because it is from Obama’s former economic advisor Larry Summers. government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work and if you have read this far, give yourself a sheckel for not being a progressive drone who is too closed minded to read research undermining their worldview. Each unemployed person has a “reservation wage”—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.

Of course, any logical and rational person knows that if you subsidize something -- you get more of it.

And if you tax something -- you get less of it.

Hence, it doesn't make much sense that govt. should tax the very firms that create jobs in order to incentivise the unemployed not to work.

But peruse the data, research and findings -- let me know what you think.

data

Maybe it does, but the only way I see it is those with education and experience opt to be unemployed for longer in order to get a job appropriate to their skill level. Yeah without it you might have bankers flipping burgers for a few weeks while looking for worker, but is that really efficent, flipping burgers decreases the time he has free to look for a better job, and he will leave Mcdonalds as soon as he finds something better.

So what encouragement there is toward unemployment is also discouragement toward underemployment and that seems like a fair trade off.

[Caninope]

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

It's a trap!

What?

I was merely qualifying Neo's statement. I'm not disagreeing with his general sentiment- people don't quit their jobs just to get all that beautiful unemployment money to pay for their new Cadillac, etc. At the same time, unemployment insurance does incentivize frictional unemployment (to a small extent) by making it easier for workers to transition from one job to another. There's nothing wrong with that, and it seems that frictional unemployment ends up benefiting the economy in the long run.

Granted, my case of the ice cream PhD grad was a little extreme. Frictional unemployment is where workers move from one job to another, based on a mismatch in skills, payment, work hours, location, taste, etc. It's essentially where a worker or an employer is dissatisfied with the other for one or more reasons.

[Frisivisia]

No.

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

Caninope, you're the best conservative ever.

[Greed and Death]

No.

Yes it does, and your at fault for unemployment, I know where you work.

[Desperate Measures]

Why do you hate the free market fairies and the charity fairies?

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

I don't understand this at all. Am I supposed to? I'm asking this genuinely.

[Choronzon]

Why do you hate the free market fairies and the charity fairies?

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

Because they did not build it.

There. Super simple answer.