HOW BAD ARE EXTENDED UI BENEFITS?

Arthur Delaney at HuffPo notes that the wingnut fuss about extended benefits discouraging people from looking for and getting work has little empirical support. A report from the Federal Reserve Bank in San Francisco found only a tiny effect:

Our analyses suggest that extended UI benefits account for about 0.4 percentage point of the nearly 6 percentage point increase in the national unemployment rate over the past few years. It is not surprising that the disincentive effects of UI would loom small in the midst of the most severe labor market downturn since the Great Depression.

Another report by the majority (Dem) staff of the Joint Economic Committee found the experts in this area did not think the extensions had a significant impact on unemployment:

Dr. Lawrence Katz, said that “the most compelling research shows only modest impacts of UI extensions on the search effort and duration of unemployment of unemployment insurance recipients."

Dr. Till von Wachter, in testimony before the Joint Economic Committee, also shared Katz’s opinion.6 “It is likely thatin severe recessions, the benefit of extended UI outweighs the costs,” argues von Wachter.

Another prominent economist who has studied unemployment insurance and other social insurance programs, Dr. Raj Chetty, has reached similar conclusions.