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EUC 2014 Emergency Unemployment Benefit Extension; Policy Leaders Consider the Effects of Unemployment Benefits on Labor Participation

Posted on | December 19, 2014 | 1 Comment

Unemployment Benefit Extension News Review today December 19, 2014:

The National unemployment rate has dropped lower throughout the course of this calendar year and currently stands at 5.8 percent. This has been good news for many in the U.S., especially those who were able to remove themselves from the long list of the unemployed. It will be a better new-year for some that found gainful employment, but there are still too many that have not been so lucky. The ranks of the long term unemployed are still above average.

Congress allowed supplemental unemployment benefits to exhaust and expire back in December 2013. Although several attempts were made to push another extension plan through Congress, it never happened. As this year closes out, it does not appear that another push is coming any time soon.

This year, finance and economic officials relayed that the extension of unemployment benefits to the unemployed had little effect on the unemployment rate and no significant impact on the labor participation rate could be expected from an extension. Could this be why many policy leaders have stopped talking about the topic. The less policy leaders debate the potential of a benefit extension, the less the chance is that it will eventually happen.
The paper, associated with the Federal Reserve Board, is titled, The Effects of Unemployment Benefits on Unemployment and Labor Force Participation: Evidence from 35 Year of Benefits Extensions. Apparently, this paper was quite influential in the U.S.

Genny Germano

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