Abstract of the Week
Posted at 2:15 p.m. on Dec. 7, 2012
Michael Greenstone and Adam Looney at The Hamilton Project explore the impact of unemployment insurance benefits on the economy and on worker incentives.
“Among the many spending cuts and tax increases legislated to take effect at the turn of the year, few policies have as direct an effect on those most affected by the Great Recession than the expiration of extended unemployment insurance (UI) benefits. In the first week of January, roughly two million individuals will lose extended benefits with the expiration of legislation that temporarily increased the duration individuals can claim UI. Although these benefits make up only $30 billion of the roughly $500 billion ‘fiscal cliff,’ they have a disproportionate effect on the lives of the unemployed and their families, as well as on the aggregate economy.”