Out of Work and Out of Luck: The Politics of Unemployment

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The Senate returned from recess today to consider Emergency Unemployment Compensation, a three-month extension to long-term unemployment insurance that lapsed over the holidays for 1.3 million Americans out of work for more than six months. Programs like it have been passed in every recession since 1957. This one had been re-authorized 11 times but expired when Congress failed to include an extension in the latest contentious budget battle. As a result only one in four unemployed Americans is estimated to receive jobless benefits, the smallest proportion in half a century. Last weekend President Obama urged Congress to re-instate long-term jobless aid. Does federal aid help job hunters stay in the labor market or discourage them from looking? How does the loss of benefits affect the economy as a whole? Should government put the money towards creating economic and job opportunities rather than providing cash?