Bye Bye Benefits: The 99 Weeker Solution

By Nizar Manek, 2 June 2012
Expiration of long-term jobless benefits could hurt the economy. Extensions on federal unemployment benefits for “99 weekers,” those out of work for 99 weeks or more, expire this month.
Critics say the move could raise the odds the economy will tumble into recession next year, and the weak May jobs report only adds to concerns. But the policy shift won’t have much of an effect on payroll employment data, says Jesse Rothstein, a former chief economist for the U.S. Department of Labor who teaches at UC Berkeley. If anything, he adds, the loss of benefits would reduce consumption by credit-constrained people, reduce aggregate demand and result in additional layoffs.
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