Extending Unemployment Benefits
The past 40 years have seen huge amounts of research showing that extending the potential duration of unemployment benefits creates an incentive for the unemployed to search less and remain unemployed longer. This is one argument used against re-extending potential duration to 75 weeks. Yet most of the research describes behavior in average economic times, not when the unemployment rate is 9.5%. What little research is available suggests smaller effects when there are fewer job vacancies.
But even if that were not true, would it matter? The original, and I believe continuing, purpose of unemployment insurance is to maintain consumption of the unemployed-to prevent hardship. With 45 percent of the unemployed out of work more than 26 weeks, by far the highest percentage since the 1930s, consumption maintenance seems to argue even more strongly than usual for the wisdom of re-extending benefits.