Jobless claims sink to near 2-year low

[classicman]

Well I went looking and found this. I'm not so sure I agree, but still is is food for thought.

In the immediate policy case, Democrats are going so far as to subsidize more unemployment. If you subsidize something, you get more of it. So if you pay people not to work, they often decide . . . not to work. Or at least to delay looking or decline a less than perfect job offer, holding out for something else that may or may not materialize.

The economic consensus—which includes Obama Administration economists in their previous lives—couldn't be clearer on this. In a 1990 study for the National Bureau of Economic Research, labor economist Lawrence Katz found that "The results indicate that a one week increase in potential benefit duration increases the average duration of the unemployment spells of UI recipients by 0.16 to 0.20 weeks."

A March 2010 economic report by Michael Feroli of J.P. Morgan Chase examined several studies and concluded that "lengthened availability of jobless benefits has raised the unemployment rate by 1.5% points."

A 2006 NBER study by Raj Chetty of UC Berkeley on a related subject begins, "It is well known that unemployment benefits raise unemployment durations."

The current recession is bearing this out, as a record 6.7 million Americans have now been out of work for at least six months. That's 45.5% of the total jobless, close to the highest share ever recorded. The number was 23.4% in February 2009. Americans tend to support jobless benefits on compassion grounds, but at some point such a policy becomes the false compassion of welfare by keeping people out of the job market and thus not learning new skills.

Link

Although this may be the case in normal circumstances, I do not know if it applies as much, more or less in the current mess we are in.