Will extension of unemployment benefits help or hurt the economy

Free Slides from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ Will Extension of Unemployment Benefits Help or Hurt the Economy? Post prepared July 23 2010 Terms of Use: These slides are made available under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics , from BVT Publishers.

Extending Unemployment Benefits ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ We are . . . providing immediate assistance to people who are out there looking for work. But ultimately, our goal is to make sure the people who are looking for a job can find a job. www.whitehouse.gov . Picture and statement on economy, July 22, 2010

Duration of Unemployment ,[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

Long-term Unemployment: Historical Comparison ,[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ Long-term unemployment always rises during and just after a recession, but the increase during the latest recession has been by far the highest for the past 60 years

Unemployment Extension as Social Policy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

Job Market Effects: Duration of Unemployment ,[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ Vertical scale shows ratio of benefit to previous wage in first year of unemployment. Horizontal scale is artificial; higher number shows longer duration, but not measured in years. Number in box shows percentage of long-term unemployed among all unemployed. Data source: OECD

Basic Job Search Model ,[object Object],[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

Effect of Reservation Wage on Unemployment ,[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

Effects of Unemployment Benefits on Job Search ,[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

Do Benefits Help or Harm the Job Market? ,[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ Photo source: http://commons.wikimedia.org/wiki/File:FEMA_-_29783_-_Workers_unemployed_by_the_freeze_in_California.jpg

Macroeconomic Effects ,[object Object],[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/

The Bottom Line ,[object Object],[object Object],[object Object],[object Object],[object Object],Post P100723 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/ Testifying before Congress on July 22, Fed Chairman Ben Bernanke called unemployment “our most important problem” and favored maintaining moderate fiscal stimulus for the time being

Will extension of unemployment benefits help or hurt the economy

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