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Benefits Quote by Paul Krugman

“Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.” quote by Paul Krugman
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“Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.”

Paul Krugman

About This Quote

Source Article: "The Natural Rate of Unemployment", The New York Times, 2021

Generous benefits may raise both structural and frictional unemployment, increasing the natural unemployment rate.

In simple terms: High benefits can boost unemployment types.

Key Takeaway

Design incentives that encourage work.

Themes

economics labor market policy

Mood

analytical concerned

Type

economic policy

When to use this quote

  • employment incentives
  • government budgeting

Key Concepts

unemployment theory welfare economics

Questions to Reflect On

  • How to balance support and work incentives?
  • What alternatives reduce unemployment?
A Different Perspective

Benefits can also improve welfare.

3.2 out of 5 (3 ratings)

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