In this posting from two years ago, I wondered anecdotally whether it could possibly be a good idea for the U.S. government to encourage able-bodied people to stay home and play Xbox for 99 weeks rather than work. The crux of my argument was “It seems strange to pay someone for 99 weeks and hope that somehow the employers that didn’t want them when they were fresh out of work would somehow want them after two years of idleness.”
It seems that the academic eggheads have weighed in on the same issue with some actual data. http://economix.blogs.nytimes.com/2013/01/11/why-the-unemployment-rate-is-so-high/ is by a professor at UC Berkeley and a former economist for President Clinton. She concludes that the current unemployment situation is pretty much normal except that “during the current recovery the normal relationship has broken down for the long-term unemployed — the increase in the vacancy rate has produced a smaller-than-expected decline in the long-term unemployment rate” and “Another recent study found that the likelihood that a job applicant receives a call-back for an interview significantly decreases with the duration of his or her unemployment.” I.e., nobody wants to hire someone who has spent the past 99 weeks staying home and playing Xbox.
[The author herself is illustrative of why the U.S. is moribund. After staring at data that shows the long-term unemployment problem was pretty much created by government action she does not say “So we should be like Singapore and simply not have unemployment insurance. Then people who lose a job would be motivated to find another one quickly, even if it was not the work that they most liked to do.” Instead she holds out hope for an even bigger government intervention: “… That’s what the Federal Reserve is worried about. It’s too bad that more members of Congress don’t share this concern.”]