Wednesday, October 4, 2017

A generous welfare state can help reduce unemployment – if there are good job opportunities for the jobless.

Are state unemployment benefits a safety net or a hammock for the lazy? In new research, Thomas Biegert explores the effects of benefits on job seekers in 20 European countries and the US. He finds that in some countries, generous benefits are linked with high unemployment rates, while in others, the opposite is the case. This difference, he writes, may be related to the setup of a country’s labor market; people are willing to work despite generous benefits if there are good job opportunities.

It is a commonplace in much research but also the media and the general public that a generous safety net provided by the welfare state to those without work is quickly turned into a hammock for the lazy. The underlying claim is that people will not actively look for a job if the state... Read More