Oxford Review of Economic Policy volume 25, issue 1, P60-93 2009 DOI: 10.1093/oxrep/grp010 View full text
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D. R. Howell, M. Rehm

Abstract: Generous unemployment benefits lie at the heart of the conventional explanation for persistent high unemployment. The effects of benefit generosity are more ambiguous in a broader behavioral framework in which workers get substantial disutility from unemployment controlling for income, and know that unemployment has scarring effects in the future. The micro evidence suggests modest effects of changes in generosity, but there are reasons to doubt that the impacts on national unemployment rates are consequentia…

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