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Scholar digs into why people with generous unemployment benefits take longer to find work

Jackie Crosby, Star Tribune (Minneapolis) on

Published in Business News

Unemployment insurance is designed as a safety net for people who lost their jobs through no fault of their own.

Economic studies show that when people are offered more generous unemployment benefits -- such as a longer time horizon and higher payments -- they take longer to find new jobs.

"The question is why?" said Connie Wanberg, a University of Minnesota professor and internationally known researcher in unemployment, job search and careers.

"I don't see a lot of evidence of slackers. The U.S. has a lot of checks and balances on people looking for work."

Wanberg's latest research, published in June in the Journal of Applied Psychology, offers nuanced results for policymakers.

Working with an international team, Wanberg compared how varying levels of unemployment benefits in the United States, Germany and the Netherlands affect the speed and quality of re-employment as well as the level of financial and psychological stress of job seekers.

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The study is the first to apply psychological methods with economic models, Wanberg said, providing a bigger picture of the complexities of employment.

"People who perceive less time pressure don't prioritize it as much," said Wanberg, who teaches in the department of Work and Organizations in the Carlson School of Management.

"They have less financial strain so they didn't spend as much time getting their resume done quickly," she added. "They didn't submit job applications as quickly. They weren't networking as quickly."

But this group also ended up with much stronger mental health and better quality jobs, something that economists studying macro-level data can't tease out.

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