29 November 2011

Are people unemployed because safety nets are too generous?

Brad Delong rebutes this claim: if people increasingly chose to become or remain unemployed because of (more) generous safety nets, what we should see is a bigger 'choice set' and more people quitting their jobs. 

What we see instead is that the unemployed feel more constrained, spend less and are more uncertain about the future in the US. Moreover, the number of people quitting their jobs has actually fallen since the beginning of the crisis...

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