Does Unemployment Insurance Necessarily Raise the Unemployment Rate and Decrease Employment?
Some analysts (e.g., most lately Professor Mulligan) have stressed the disincentive outcomes of unemployment insurance on the unemployment rate and also the level of employment. I believe it helpful to think about the offsetting outcomes arising from numerous results, and hence distinguishing among the two variables. In my view, the impact of UI is a lot more complicated than it would seem at first glance, with UI potentially increasing employment while concurrently increasing the unemployment rate. In addition, according to newer investigation, even if UI extends unemployment duration, it nevertheless might be welfare-enhancing. In other words, some researchers appear to have had their worldview frozen in 1990.
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