Attention Economy


Monday, August 30, 2010

Barro on Unemployment Insurance

Harvard economist, Robert Barro, notes in his WSJ op-ed
(http://online.wsj.com/article/SB10001424052748703959704575454431457720188.html):
"In a recession, it is more likely that individual unemployment reflects weak economic conditions, rather than individual decisions to choose leisure over work. Therefore, it is reasonable during a recession to adopt a more generous unemployment-insurance program. In the past, this change entailed extensions to perhaps 39 weeks of eligibility from 26 weeks, though sometimes a bit more and typically conditioned on the employment situation in a person's state of residence. However, we have never experienced anything close to the blanket extension of eligibility to nearly two years. We have shifted toward a welfare program that resembles those in many Western European countries".

These previous posts also deal with the issue of unemployment insurance