Sunday, October 16, 2011

How much to pay the unemployed?

Rules igry29-05-2008 How much to pay the unemployed? How much money should get the unemployed? Allowance should not be too generous, otherwise unemployed playing for time to search for classes, economists warn. However, new research shows that it is not necessary to pay and allowance is too low. Not just for social or ethical reasons, but because of personal interests of society. Researchers know that the labor market for a long time: between the size of unemployment benefits and the average length of job search (for unemployed), there is an obvious link. The more generous protection against risks, the longer people are unemployed. U.S. experts say: if the allowance is increased by 10%, length of unemployment increases by 4-8%. The responsibility for this, according to the prevailing view of economists, is the distortion of incentives. Who's got too much allowance for doing nothing, not in a hurry to look for work or too critically eyeing the new place. In the language of economists, it sounds like a "moral hazard": the people abusing the services of insurance. But a new study casts doubt on this view. Ray Chetty University of California, concluded: now significantly overestimated the negative effects of incentives, unemployment benefits on the behavior of the person concerned.

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