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Joint Economic Committee Report: Does Unemployment Insurance Inhibit Job Search?

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Does Unemployment Insurance Inhibit Job Search? July 2010 Report by the U.S. Congress Joint Economic Committee, Representative Carolyn Maloney, Chair

  • “The principal purpose of the unemployment insurance (UI) program is to provide workers with a safety net in the event that they lose their job. However, some worry that unemployment insurance benefits may inhibit unemployed workers from vigorously looking for or accepting a new job. Those fears are unfounded. The best evidence suggests that during this current economic downturn both the unemployment rate and duration of unemployment were minimally impacted by unemployment insurance benefits and the extensions of benefits. To the extent that the unemployment rate even rises, UI may be providing an enormous social benefit by preventing people not from taking jobs, but from dropping out of the labor force altogether (and often permanently), relying instead on more costly programs like disability benefits.”
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