A lesson on why we want limited duration unemployment insurance

Published January 10, 2022 12:00am ET



The latest employment numbers should contain a little warning for us: Sometimes it’s necessary to be cruel to be kind. Strict time limits on unemployment insurance payments is one of those times.

The grand difference between U.S. unemployment insurance and that in Europe has long been that the United States had very little long-term unemployment. As Richard Layard — no, he’s on the left — has been pointing out for decades, a major cause of this dynamic is that U.S. unemployment benefits usually expire at 26 weeks. In contrast, benefits in Europe can last forever. Or until retirement age, at least. Topline: Paying people to do nothing will lead to more people doing nothing.

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