pulp8721
01-24-2014, 11:15 PM
Looks like Rand was proven right once again
Some excerpts from their conclusion:
...the evidence to date is not supportive of this idea and instead appears to support the findings in Hagedorn,
Karahan, Manovskii, and Mitman (2013) and Mitman and Rabinovich (2013) that the negative
effects of unemployment benefit extensions on job creation decisions of employers dominate
any potential stimulative effect that some ascribe to such policies.
The evidence on the relative unimportance on the stimulus to aggregate demand in North
Carolina becomes even more striking when the sectoral composition of post-reform employment
growth is considered. One would expect a decline in the aggregate demand in North
Carolina to affect most severely the non-tradeable service sector within the state. In contrast,
all of the employment growth in North Carolina was in services, according to the CES.
If unemployed were actually searching and that search was productive,
stopping their search must have led to a decline in employment, at least relative to the other
states.
At the minimum, this suggests that at least a sizable part of the decline
in the labor force observed in LAUS data for North Carolina might not be related to the
reform of the unemployment insurance system. Finally, the decline in the labor force in North
Carolina apparent in the current release of BLS LAUS data (subject to future revisions) is in
sharp contrast to the increase in the labor force in North Carolina measured directly in the
household survey.
Are the new jobs created in NC somehow inferior? We see no evidence for that in the data
on hours, employment and wages.
http://economics.sas.upenn.edu/~mitmanke/NC_Case_Study.pdf
Some excerpts from their conclusion:
...the evidence to date is not supportive of this idea and instead appears to support the findings in Hagedorn,
Karahan, Manovskii, and Mitman (2013) and Mitman and Rabinovich (2013) that the negative
effects of unemployment benefit extensions on job creation decisions of employers dominate
any potential stimulative effect that some ascribe to such policies.
The evidence on the relative unimportance on the stimulus to aggregate demand in North
Carolina becomes even more striking when the sectoral composition of post-reform employment
growth is considered. One would expect a decline in the aggregate demand in North
Carolina to affect most severely the non-tradeable service sector within the state. In contrast,
all of the employment growth in North Carolina was in services, according to the CES.
If unemployed were actually searching and that search was productive,
stopping their search must have led to a decline in employment, at least relative to the other
states.
At the minimum, this suggests that at least a sizable part of the decline
in the labor force observed in LAUS data for North Carolina might not be related to the
reform of the unemployment insurance system. Finally, the decline in the labor force in North
Carolina apparent in the current release of BLS LAUS data (subject to future revisions) is in
sharp contrast to the increase in the labor force in North Carolina measured directly in the
household survey.
Are the new jobs created in NC somehow inferior? We see no evidence for that in the data
on hours, employment and wages.
http://economics.sas.upenn.edu/~mitmanke/NC_Case_Study.pdf