Not that they'll ever read it, but a study released by the Federal Reserve Division of Research and Statistics, Monetary Affairs blows a huge hole in one of the GOP's most enduring fictions about providing jobless Americans with unemployment benefits.
You know the one about how providing extensions just serves to make the unemployed lazy. How it encourages them not to look for a job. and actually fosters unemployment. So cutting off their benefits will make them "get off their butts" and go find work, because they'll have no other choice. This is one of the GOP's greatest hits because it feeds into the (often race-based) biases of their constituents and justifies doing absolutely nothing to help those Americans. And nothing is what the GOP does best.
But a new study by Regis Barnichon of the Centre de Recerca en Economia Internacional in Barcelona and Andrew Figura of the Federal Reserve Board reveals that provision of long term unemployment benefits has no significant impact on whether a person continues to pursue employment:
Extending benefits to unemployed workers beyond the 26 weeks provided by most states has little effect on the unemployment rate and essentially no impact on labor force participation, a recent working paper released by the Federal Reserve Board found.
That information, while interesting, would have been a whole lot more relevant had it been uncovered nine months earlier.
From the study:
During the 2008-2009 recession, U.S. unemployment insurance (UI) benefits were extended to unprecedented levels, with UI duration increasing from 26 weeks—the regular duration—to as much as 99 weeks in some states, prompting a lively debate in policy and academic circles about the adverse effects of such extensions on the search behavior of job seekers and thus on the unemployment and labor force participation rates.
The Fed refers to these extensions of benefits as Emergency and Extended Unemployment Benefits, or "EEB." It found that providing extended benefits to the unemployed did not "cause unemployment," which is the crux of the GOP's mythology:
[B]ecause EEB has very little effect on the behavior of the relatively large share of individuals who are at the beginning of their unemployment spells, the overall effect of EEB on the unemployment rate is fairly modest; at its peak (in terms of the average number of benefit weeks provided) EEB boosted the unemployment rate by one-third percentage point."
Further, they determined that "the effect of EEB on the [labor] participation rate is estimated to have been quite small."
The reason is that emergency extensions don't affect most of the unemployed, just a small number who need it most. Translated into real world terms, these are the people who have exhausted all of their available resources and may be on living on the edge of homelessness:
The main reason is that EEB only affects eligible individuals with relatively long unemployment durations (greater than 18 weeks), and such individuals represent a relatively small fraction of the unemployment population (even in the recent recession where unemployment duration reached record highs, their share stood only at about 25 percent). In contrast, most of the unemployed are either simply ineligible for unemployment insurance (around 40 percent of the unemployed in recessions are non job losers), or, if eligible (job losers), respond little to the availability of EEB because they have either not been unemployed for very long (about one-third of the unemployed) or have durations above the maximum duration of EEB (a little over 5 percent of the unemployed).
Republicans have blocked every attempt to provide extended benefits to the long- term unemployed since 2013. Meanwhile they haven't passed a single piece of job-creating legislation. So what has been the result of this "experiment?" The Labor Force participation rate is at a record low
in this country:
A record 92,269,000 Americans 16 and older did not participate in the labor force in August, as the labor force participation rate matched a 36-year low of 62.8 percent, according to the Bureau of Labor Statistics.
This, while the "unemployment" rate has fallen to 6.1 %,(no thanks [as the study shows] to the Republican Party, since the effect of cutting off benefits to those long-term unemployed was insignificant to the employment rate) the number of people who have completely given up looking for work continues to reach record levels. How can these two things be reconciled? The major reason is that people who aren't looking for a job at all anymore -- those same long-term unemployed who the Republicans cut off and let slide into the abyss --are not counted as "unemployed."
The 92,269,000 who did not participate in the labor force are those in the civilian noninstitutional population who did not have a job and did not actively seek one in the last four weeks. Because they did not seek a job, they did not count as “unemployed.”
Ergo, based on the Fed study that shows providing long term unemployment benefits doesn't affect the labor participation rate to any appreciable degree, and since the long term unemployed aren't receiving any benefits anyway, thanks to the Republican Party, we can deduce several things:
Cutting off their benefits didn't make the employment picture any better for millions of unemployed Americans. It just made their lives that much more miserable without any significant impact on their willingness or ability to find a job. It did not prompt unemployed Americans to go out and desperately search for work. It did not reduce the unemployment rate.
And if the Republicans continue to insist that cutting off benefits had an effect, then (based on the data) that effect was to prompt Americans to give up looking for work altogether.
Probably because without that emergency extension they barely had enough to survive.