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Published Opinion Articles

Want to Help the Long-Term Unemployed? Try a Two-Tiered Minimum Wage.

 

The Washington Post, Rand Ghayad, May 5, 2014

 

Around 3.5 million people are still long-term unemployed. Of them, about one in five has less than a high school diploma, and one in five is age 26 or younger. In other words, many of them are probably applying for minimum-wage jobs. The problem is that there's clear evidence that employers are discriminating against the long-term unemployed, based on the belief that they must be bad workers to be out of work for so long. It has created a jobless trap: Once you've been unemployed for six months, it's hard to come back.

 

But what if companies could pay the long-term unemployed relatively less? That might make up for some of the stigma associated with prolonged joblessness. And that's why a higher minimum wage shouldn't apply to the long-term unemployed, not for now. If it did, it could become a permanent hiring obstacle for people who need to be hired the most.

US Labour Market: Broken With and Without Unemployment Benefits

VOX, Rand Ghayad, July 2013

Will US unemployment benefits help or hinder those out of work? Much recent economic theory suggests that benefits reduce people’s likelihood of getting work. This column presents new research that looks in detail at various types of unemployment – job loser, job leaver, new entrant, re-entrant – suggesting that there is a limit to the extent that unemployment benefits reduce the amount of effort put into searching for a new job. The increase in the unemployment rate relative to job openings will persist when unemployment benefit programmes expire.

It’s Not a Skill Mismatch

 

VOX, Rand Ghayad, Jan 2013

US unemployment seems stuck at an unusually high level of 8%, prompting some to suggest a widespread skills mismatch. This column argues that a skills mismatch is not supported by the evidence. Rather, out of the possible explanations, it seems that any shift in the ratio between unemployment and vacancies is driven by either lower search efforts by the long-term unemployed or by a reduction in their employability.

Does Welfare Make U.S. Unemployment Worse?

World Economic Forum, Rand Ghayad, July 2013

Exploration of the evolution of job openings and unemployment using recent data on unemployed persons decomposed by their reason for unemployment, which determines their eligibility to collect benefits, suggests that up to half of the increase in the unemployment rate relative to the fitted Beveridge curve is explained by job leavers, new entrants, and re-entrants – those who are ineligible to collect unemployment benefits. The evidence from the decompositions suggests that the increase in the unemployment rate relative to job openings will persist when unemployment-benefit programmes expire.

No, Rand Paul, There's No Reason to Cut Unemployment Benefits

 

The Atlantic, Rand Ghayad, Dec 30 2013

 

Rand Paul says he cares about the unemployed.He says it's "our moral obligation as a society to take care of those who cannot take care of themselves." That "no one asserts that the problem [of long-term unemployment] is people not wanting to work." Rather "the problem is not in the minds of the unemployed, but in the minds of employers."

 

So why does he want to end unemployment benefits for people who have been out of work for 6 months or longer? Well, Paul cites my work on long-term unemployment as a justification—which surprised me, because it implies the opposite of what he says it does.

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