Question

During regular economic times in the United States, the maximum length of time a worker can collect unemployment insurance is 26 weeks. During recessions, however, Congress often increases the length of time in which workers can collect benefits. During the recent financial crisis, workers could collect benefits for up to 99 weeks in some states. This system will:

Answer 1

Unemployment insurance in the U.S. is funded by a federal tax on employers, with most states providing benefits for up to 26 weeks, which can be extended during recessions. The average benefit is about one-third of a worker's previous salary, varying across states. The duration of benefits can influence return-to-work incentives, but job search assistance programs can counteract potential delays.

Step-by-step explanation:

The unemployment insurance system in the United States is primarily funded through a federal tax collected from employers. States have the autonomy to determine the taxable wage base higher than the federal minimum of $7,000, and as a result, 41 states have opted for a higher limit. Most states offer unemployment benefits up to 26 weeks, but during periods of high unemployment or economic downturns such as the financial crisis, these benefits can be extended. For example, during the recent financial crisis, benefits were extended up to 99 weeks in some states. The average benefit amounts to about one-third of the workers' previous wage but varies considerably between states.

It is important to realize that the duration of unemployment benefits can impact the incentives for individuals to return to work. A system that provides extended benefits may reduce the urgency to find employment compared to a system with shorter benefit periods. Nevertheless, government programs aimed at assisting with job search or retraining can often mitigate these effects by encouraging individuals to re-enter the job market more quickly.

Answer 2

the options are missing:

a) encourage people to search longer for a job.

b) provide workers with an adequate safety net.

c) prolong the amount of time a person stays out of work.

d) increase the number of workers looking for work.

e) allow more people to start businesses.

The answer is:

• b) provide workers with an adequate safety net.
• c) prolong the amount of time a person stays out of work.

This type of actions can be considered humane and necessary due to certain special circumstances, but it has two effects, one good and one bad:

The good effect is that it provides workers' families with an adequate safety net. I.e. it allows a lot families in need to cover some of their basic necessities which helps them avoid a lot of suffering.

The bad effect is that it encourages people to not search jobs or only accept certain type of jobs (high paying jobs), which increases the amount of time someone is unemployed. If you are in desperate need for a job you will take any job available, but if you can afford to wait, then you will wait until you get a good job.