random thought about unemployment insurance

Riffing off of Greg Mankiw’s comments

I think UI is probably a good thing, all things considered – I think that it is very possible for hard-working, honest folks to need some financial support during hard times.

But Dr. Mankiw does raise a powerful point – if 99 weeks is too short, what is sufficiently long? 199 weeks? 2000 weeks? I’m fairly certain it’s not something that anyone knows, it’s just a “gut feeling”.

My thought would be: make UI benefits decay over time. They should start off extra-generous, and then every month they should get a little less generous. If the government (or as some people say, ‘we’) decide that people need more support, it shouldn’t be hard to include it into that decay factor.

As their insurance payments decay, people will naturally decide for themselves when they need to get back into the job market.

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