The House Ways and Means Committee released a Report today finding that job growth weakened post the 2008 recession while EUC paid out record levels of benefits. The full report is available at http://waysandmeans.house.gov/uploadedfiles/euc_labor_day_report_082814.pdf
The report points to findings from scholars at the University of Pennsylvania who found that the extended EUC benefits had a “dramatic negative effect on employment” because “extensions of unemployment benefits lead to a decline in job creation by employers.” This effect is so large that “our estimates imply that unemployment benefit extensions can account for most of the persistently high unemployment after the Great Recession.”
The Ways and Means Report notes that the most recent EUC program was much longer than previous programs, provided significantly more weeks of EUC benefits and dramatically increased the federal deficit. Job creation post- recession was slower than had been projected by the Administration and much slower than had been the case following all other recessions post World War II.
The report concludes that Policymakers should heed the research and ensure that future extended benefit programs return to their timely, targeted, and temporary roots, instead of the long-running and larger program that was in effect between 2008 and 2013.
