Thursday, July 16, 2009

If a country has more generous unemployment compensation(EI), what can you conclude:?

Will the duration of each unemployment spell be shorter or longer, and will the unemployment rate increase or decrease?



very short answers only please. Thankyou!



If a country has more generous unemployment compensation(EI), what can you conclude:?





the duration will be longer because there less of an incentive for the unemployed to look for jobs when the government is been generous. - The unemployment rate will increase for the same reason the unemployment spells become longer. The opportunity cost is of not looking for a job is not high enough because of the government%26#039;s generous compensation

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