Feds’ unemployment benefits made job recession worse: Study

The Washington Times reports:

If you pay people not to work, they won’t work — and cutting off their payments sends them scurrying back into the job market, according to new research by three academics who looked at the federal government’s extended unemployment benefit program and concluded that it actually deepened, rather than helped, the jobs recession.

Once the benefits ended at the end of 2013, the jobs picture began to rebound, trouncing even some of the rosier predictions for the year, the academics said in a new National Bureau of Economic Research paper released this month.

Nearly one million workers who would have sat it out and taken unemployment benefits instead got jobs in 2014 because their benefits ended, the researchers said. And when knock-on effects are included, “nearly all” of last year’s new jobs can be attributed to the end of the federal program, the researchers, led by Marcus Hagerdorn, an economist at the University of Oslo, said.

Yet again, mainstream neo-classical economists confirm the supply of labor is an upward sloping curve.