Friday, January 10, 2014

NC: What happens when jobless benefits are cut?

North Carolina may offer clues.

Last summer, North Carolina slashed the amount of cash it gave to people after they lost their jobs and the state also reduced the number of weeks they could receive benefits. Within several months, the unemployment rate fell a few ticks and by November it fell to a five-year low.
Similar though less dramatic declines occurred in Georgia and South Carolina after they made benefits less generous starting in 2012.

Vindication for critics of extended unemployment benefits? Hard to say. It’s the experience of just a few states and others have also witnessed sharp declines despite retaining more generous benefits. Indeed, the national unemployment rate has fallen by nearly 1 percentage point in the past year. Read: How end of extra benefits could send U.S. unemployment rate lower.

Still, it’s worth taking a look at North Carolina’s experience.

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