Which of the following is correct?
A)Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed.
B)Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs.
C)Studies show that when the unemployed become ineligible for benefits,the probability of their finding a job rises markedly.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Studies have shown that unemployment insurance can create moral hazard, where the unemployed are less motivated to actively search for jobs because they have a safety net. When the safety net is removed, they often become more motivated to find work and their chances of finding a job increase. Option A is partially correct, as some studies do suggest that unemployment insurance can reduce job search efforts, but it does not necessarily raise structural unemployment. Option B is not entirely accurate, as there are differing opinions among economists about the value of unemployment insurance.

Which of the Following Is Correct