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<\/a>Dur\u00ading his Decem\u00adber 2013 Hawai\u00adian vaca\u00adtion, Pres\u00adi\u00addent Oba\u00adma phoned law\u00admak\u00aders, ask\u00ading them to extend unem\u00adploy\u00adment ben\u00ade\u00adfits. They did not. Which is a good thing, accord\u00ading to a new study pub\u00adlished by NBER<\/span>. [Cred\u00adit: Fox News]<\/p><\/div>A lit\u00adtle more than a year ago, the Pres\u00adi\u00addent was dis\u00adtressed. It was a few days after Christ\u00admas 2013, and extend\u00aded unem\u00adploy\u00adment ben\u00ade\u00adfits for 1.3 mil\u00adlion peo\u00adple were about to expire. In a typ\u00adi\u00adcal\u00adly per\u00adfunc\u00adto\u00adry lob\u00adby\u00ading effort, he called two Sen\u00ada\u00adtors to urge them to move a bill to pre\u00adserve the benefits.\n To recov\u00ader from his exer\u00adtions, he and his fam\u00adi\u00adly then \u201cven\u00adtured to the white-sand beach at Bel\u00adlows Air Force Sta\u00adtion, which is on the wind\u00adward side of the island of Oahu and fea\u00adtures turquoise water and a stun\u00adning view of the Moku\u00adlua Islands,\u201d the Wash\u00ading\u00adton Post<\/a> reported.<\/p>\n That tran\u00adquil scene augured the best year for U.S. employ\u00adment growth since 1999<\/a>. Accord\u00ading to the Labor Depart\u00adment, the econ\u00ado\u00admy added more than 3.1 mil\u00adlion<\/a> jobs in 2014. The topline unem\u00adploy\u00adment rate was 5.6% in Decem\u00adber, down from 6.7% the pri\u00ador Decem\u00adber and the low\u00adest rate since June 2008<\/a>.<\/p>\n And here is the sur\u00adpris\u00ading major rea\u00adson for the resur\u00adgence in employ\u00adment: Con\u00adgress spurned the President\u2019s entreaties and let extend\u00aded unem\u00adploy\u00adment ben\u00ade\u00adfits expire.<\/p>\n In a work\u00ading paper<\/a> pub\u00adlished by the Nation\u00adal Bureau of Eco\u00adnom\u00adic Research (NBER<\/span>), Mar\u00adcus Hage\u00addorn, Iourii Manovskii and Kurt Mit\u00adman found that the House\u2019s refusal to extend those ben\u00ade\u00adfits was the lead\u00ading rea\u00adson for what they term the \u201c2014 employ\u00adment mir\u00ada\u00adcle.\u201d Their study con\u00adclud\u00aded that the abrupt drop in ben\u00ade\u00adfit dura\u00adtion led to the cre\u00adation of 1.8 mil\u00adlion new jobs, almost one mil\u00adlion of which were filled by those who would not have entered the labor mar\u00adket if their ben\u00ade\u00adfit checks had kept coming.<\/p>\n The government\u2019s unem\u00adploy\u00adment insur\u00adance pro\u00adgram is a fed\u00ader\u00adal-state ven\u00adture that pro\u00advides 26 weeks of ben\u00ade\u00adfits for cov\u00adered work\u00aders who lose their jobs. As the econ\u00ado\u00admy wors\u00adened in 2008, Pres\u00adi\u00addent Bush approved a bill that tem\u00adporar\u00adi\u00adly length\u00adened the dura\u00adtion of those ben\u00ade\u00adfits. Pres\u00adi\u00addent Oba\u00adma and Con\u00adgress repeat\u00aded\u00adly reau\u00adtho\u00adrized these tem\u00adpo\u00adrary exten\u00adsions. Until Decem\u00adber 2013.<\/p>\n At that point, the aver\u00adage dura\u00adtion of ben\u00ade\u00adfits was 53 weeks, with ben\u00ade\u00adfits last\u00ading 73 weeks in three states (IL<\/span>, NV<\/span> and RI<\/span>) and few\u00ader than 40 weeks in only one (NC<\/span>). In those days after Christ\u00admas 2013, aver\u00adage ben\u00ade\u00adfit dura\u00adtion dropped overnight to 25 weeks. By chang\u00ading the rules so sud\u00adden\u00adly, dra\u00admat\u00adi\u00adcal\u00adly and with\u00adout regard to the eco\u00adnom\u00adic con\u00addi\u00adtions in indi\u00advid\u00adual states, the gov\u00adern\u00adment cre\u00adat\u00aded what the authors call a \u201cqua\u00adsi-nat\u00adur\u00adal exper\u00adi\u00adment\u201d on how a cut in job\u00adless ben\u00ade\u00adfits would affect jobs.<\/p>\n The government\u2019s own esti\u00adma\u00adtors, using their best eco\u00adnom\u00adic mod\u00adels, fore\u00adcast doom. Unem\u00adploy\u00adment ben\u00ade\u00adfits, the Con\u00adgres\u00adsion\u00adal Bud\u00adget Office assert\u00aded, spur eco\u00adnom\u00adic growth and induce \u201cthe largest effects on out\u00adput and employ\u00adment per dol\u00adlar of bud\u00adgetary cost.\u201d They pre\u00addict\u00aded that the unem\u00adploy\u00adment rate would aver\u00adage 6.7 per\u00adcent<\/a> in the fourth quar\u00adter of 2014; instead, it aver\u00adaged 5.7 per\u00adcent<\/a>. The President\u2019s Coun\u00adcil of Eco\u00adnom\u00adic Advis\u00aders fore\u00adcast the loss of 240,000 jobs. Instead, the econ\u00ado\u00admy added a month\u00adly aver\u00adage of more than 260,000 jobs<\/a>.<\/p>\n The authors exam\u00adined the link between the sud\u00adden and sweep\u00ading ben\u00ade\u00adfit ter\u00admi\u00adna\u00adtions and the employ\u00adment surge. They grouped states accord\u00ading to the length of unem\u00adploy\u00adment ben\u00ade\u00adfits avail\u00adable before the lapse. They found that job growth in high-ben\u00ade\u00adfit states (where job\u00adless work\u00aders could col\u00adlect ben\u00ade\u00adfits for 54 weeks or more) exceed\u00aded the 2014 nation\u00adal aver\u00adage, while growth in low-ben\u00ade\u00adfit states lagged that aver\u00adage. Job growth was most pro\u00adnounced in states where ben\u00ade\u00adfit cuts were great\u00adest. Based on these find\u00adings, the authors esti\u00admat\u00aded that reduc\u00ading the nation\u00adal aver\u00adage dura\u00adtion of ben\u00ade\u00adfits from 53 to 25 weeks increased employ\u00adment by 2 percent.<\/p>\n The researchers then went fur\u00adther, com\u00adpar\u00ading adja\u00adcent coun\u00adties that belonged to dif\u00adfer\u00adent states. Fair\u00adfax Coun\u00adty (VA<\/span>), for exam\u00adple, is just across the Potomac from Mont\u00adgomery Coun\u00adty (MD<\/span>). Before Decem\u00adber 2013, Vir\u00adginia pro\u00advid\u00aded job\u00adless ben\u00ade\u00adfits for 40 weeks, Mary\u00adland for 63 weeks. When Con\u00adgress let extend\u00aded unem\u00adploy\u00adment ben\u00ade\u00adfits expire, the change was more extreme in Mary\u00adland. Look\u00ading at 1178 pairs of sim\u00adi\u00adlar\u00adly adja\u00adcent coun\u00adties in neigh\u00adbor\u00ading states with dif\u00adfer\u00adent ben\u00ade\u00adfit dura\u00adtions, they again found that employ\u00adment growth was much larg\u00ader in high-ben\u00ade\u00adfit coun\u00adties than in their low-ben\u00ade\u00adfit neigh\u00adbors, con\u00adfirm\u00ading their ear\u00adli\u00ader esti\u00admates that ben\u00ade\u00adfit cuts had increased employ\u00adment by 2 per\u00adcent nationally.<\/p>\n Apply\u00ading more for\u00admal econo\u00admet\u00adric analy\u00adsis that accounts for oth\u00ader vari\u00adables, the authors esti\u00admat\u00aded that the expi\u00adra\u00adtion of extend\u00aded unem\u00adploy\u00adment ben\u00ade\u00adfits account\u00aded for 61 per\u00adcent of the aggre\u00adgate employ\u00adment growth that occurred dur\u00ading 2014.<\/p>\n \u201c<\/span>The con\u00adsen\u00adsus in the pro\u00adfes\u00adsion seemed to pre\u00addict a neg\u00ada\u00adtive impact of the cut in ben\u00ade\u00adfit dura\u00adtions on the size of the labor force,\u201d the authors wrote. \u201cInstead, we found that the reform led to almost a mil\u00adlion non-par\u00adtic\u00adi\u00adpants enter\u00ading the labor market.\u201d<\/p>\n The impli\u00adca\u00adtions, as the authors observed, are Coper\u00adni\u00adcan. Pol\u00adi\u00adcy\u00admak\u00aders have in the past rou\u00adtine\u00adly used ben\u00ade\u00adfit exten\u00adsions \u201cfor the pur\u00adpose of eco\u00adnom\u00adic sta\u00adbi\u00adliza\u00adtion.\u201d The thought was that by spend\u00ading more on unem\u00adploy\u00adment ben\u00ade\u00adfits, gov\u00adern\u00adment would stim\u00adu\u00adlate con\u00adsumer spend\u00ading and grow the econ\u00ado\u00admy, lead\u00ading to an increase in employment..<\/p>\n \u201c<\/span>Yet the find\u00adings in this paper imply that the neg\u00ada\u00adtive effects of unem\u00adploy\u00adment ben\u00ade\u00adfit exten\u00adsions on employ\u00adment far out\u00adweigh the poten\u00adtial stim\u00adu\u00adla\u00adtive effects often ascribed to this pol\u00adi\u00adcy,\u201d they wrote.<\/p>\n The study chal\u00adlenges a core pro\u00adgres\u00adsive dog\u00adma: that the more gov\u00adern\u00adment bor\u00adrows and spends, the more it uses its coer\u00adcive pow\u00aders to tax and reg\u00adu\u00adlate, the more soci\u00adetal ben\u00ade\u00adfit it produces.<\/p>\n It is more like\u00adly that the rela\u00adtion\u00adship between gov\u00adern\u00adment inter\u00adven\u00adtion and social ben\u00ade\u00adfit is non-lin\u00adear. Some lev\u00adel of tax\u00ada\u00adtion, spend\u00ading, reg\u00adu\u00adla\u00adtion and debt is ben\u00ade\u00adfi\u00adcial and nec\u00ades\u00adsary. But such activ\u00adi\u00adties can be car\u00adried to excess. When they are, they do more harm than good, reduc\u00ading social ben\u00ade\u00adfits and in many cas\u00ades harm\u00ading the very peo\u00adple gov\u00adern\u00adment aims to help. Such appears to be the case with extend\u00aded unem\u00adploy\u00adment benefits.<\/p>\n By stand\u00ading firm against polit\u00adi\u00adcal pres\u00adsures and the mis\u00adguid\u00aded coun\u00adsel of gov\u00adern\u00adment econ\u00ado\u00admists, House Repub\u00adli\u00adcans helped pro\u00adduce a ban\u00adner year for job growth.<\/p>\n Amer\u00adi\u00adca is bet\u00adter off today because the Pres\u00adi\u00addent didn\u2019t let the demands of gov\u00ader\u00adnance inter\u00adfere with his beach time.<\/p>\n","protected":false},"excerpt":{"rendered":" A lit\u00adtle more than a year ago, the Pres\u00adi\u00addent was dis\u00adtressed. It was a few days after Christ\u00admas 2013, and extend\u00aded unem\u00adploy\u00adment ben\u00ade\u00adfits for 1.3 mil\u00adlion peo\u00adple were about to expire. In a typ\u00adi\u00adcal\u00adly per\u00adfunc\u00adto\u00adry lob\u00adby\u00ading effort, he called two \u2026 Con\u00adtin\u00adue read\u00ading