And preliminary results are in:
... last July, North Carolina sharply cut its unemployment program, reducing the maximum number of weeks of benefits to 20 from 73 and reducing the maximum weekly benefit as well.
The rest of the country is now following North Carolina’s lead. A federal program supplying extra weeks of benefits to the long-term unemployed expired at the end of 2013, and congressional Democrats failed in an effort to revive it. About 1.3 million jobless workers received their last payment on Dec. 28. Starting on Jan. 1, the maximum period of unemployment payments dropped to 26 weeks in most states, down from as much as 73 weeks.
With that move, the country’s safety net for jobless workers has undergone a sudden transformation, from one aimed at providing modest but sustained protection to workers weathering a tough labor market to one intended to give relatively short-term aid before spurring workers to accept a job, any job.
It is still early, but the results in North Carolina suggest that there are both gains and losses from cutting back on support for the jobless. The state’s unemployment rate has plummeted to 7.4 percent from 8.8 percent, the sharpest drop in the country. In part, that is because more jobless workers are connecting with work. But an even greater number of workers have simply given up on finding a job. ...
via www.nytimes.com
The unemployment rate is one of the worst macroeconomic indicators because it can improve (go lower) when macro conditions worsen (people drop out of the labor force by discontinuing their job search).
