Do unemployment benefits deter job seeking?

Do unemployment benefits deter job seeking?

President Obama made a plea to the Senate toextend unemployment benefitsA to 3 million Americans who will stop receiving them this month. He said it’s the government’s responsibility “to offer emergency assistance to people who desperately need it … to help them make ends meet and support their families even as they’re looking for another job.”

With about five unemployed people per available job and 6.8 million who have beenA out of workA for 27 weeks or more, this seems like a no-brainer at first glance. Proponents sayA this emergency relief can help the unemployed pay bills and put food on the table and also stimulate consumer spending. Yet many argue that extending unemployment benefits will deter people from looking for jobs and dig deeper into the nation’s deficit.

So which argument is right?

A March 2010A report from JPMorgan ChaseA argues that emergency unemployment benefits have contributed to longer durations of unemployment and a higher unemployment rate.

But in anA April 2010 report from the Federal Reserve Bank of San Francisco, researchers Rob Valleta and Katherine Kuang wrote: “Analysis of unemployment data suggests that extended unemployment insurance benefits have not been important factors in the increase in the duration of unemployment or in the elevated unemployment rate.”

And this July, the U.S. Congress Joint Economic Committee released a report entitled“Does Unemployment Insurance Inhibit Job Search?”A The report states “it is unlikely that extended unemployment benefits inhibit individuals’ job search efforts. Simply put, even a low‐paying job is likely to provide more support than that offered by [unemployment insurance].”

As always, you can count EresumeX as your free job search as well as free resume search.

~Dawn Krovicka