13
Oct
2010
Bask On Nobel
Someone told me that one of the Nobelists had a NYT article very recently in which he explained that their work does NOT say that unemployment benefits from the government necessarily raise the unemployment rate. But I can’t find any such article. Any help?
I couldn’t find anything, either, but I did find this:
http://economix.blogs.nytimes.com/2010/10/11/the-work-behind-the-nobel-prize/
Can’t find anything either. Mark Thoma wrote a small summary of Diamond’s work on on unemployment insurance though.
http://moneywatch.bnet.com/economic-news/blog/maximum-utility/nobel-prize-winners-how-we-can-reduce-unemployment/923/
” The work is particularly relevant for labor markets. In particular, the work helps us to understand how it is that there can be workers willing to work, firms that are willing to hire, and yet still have an elevated unemployment rate. Just as importantly, the work helps us to design unemployment compensation and other programs that help to promote efficient matches between workers and firms. To get a flavor of this work, one result from Peter Diamond speaks to the benefits of unemployment insurance. This results states that labor markets can be made more efficient through unemployment insurance that allows some workers to pass up jobs. Without insurance, workers would be motivated to take any job that comes their way, even jobs they are overqualified for, and that leads to an inefficient match between the worker and firm and closes off the job to someone who is better qualified for it. Bu allowing workers the time to find the jobs they are suited for, they are much more productive and economic growth will be higher. Thus, the belief that higher unemployment compensation always leads to inefficient outcomes, a claim we’ve heard a lot in the recent debate over whether to extend unemployment insurance, is undermined by this work.”