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Perverse unemployment incentives

Given today's USA Today report that a record one in six Americans is receiving government anti-poverty aid (and that the numbers are rising), I find Robert Barro's Wall Street Journal op-ed questioning the president's expansion of unemployment insurance to 99 weeks, apropos.

In it, Barro recognizes that, "in a recession, it is more likely that individual unemployment reflects weak economic conditions, rather than individual decisions to choose leisure over work." But "we have never experienced anything close to the blanket extension of eligibility to nearly two years," even when we saw worse unemployment than this during the 1982 recession (10.8% compared to 10.1%). By expanding unemployment insurance, he says, we will offer a perverse incentive for people to stay unemployed.

No wonder the welfare state keeps growing.

One last thing…
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