Remember when Nancy Pelosi was Speaker of the House and had a national platform on which to put forth the odd economic theory that extending unemployment benefits created jobs?
You know what actually created a lot of jobs in 2014? According to a new study, it was cutting unemployment benefits that led to more people having jobs. The Washington Examiner reports:
Sixty percent of job creation in 2014 was caused by the expiration of unemployment benefits, according to a new working paper published by the National Bureau of Economic Research. …
The new new working paper found that the expiration of benefits was responsible for the creation of over 1.8 million jobs. Nearly 1 million of those jobs were created by workers who would have otherwise stayed out of the labor force if unemployment benefits had been extended. Overall, almost 3 million jobs were created in 2014.
“The negative effects of unemployment benefit extensions on employment far outweighs the potential stimulative effects often ascribed to this policy,” the study said.
It found that "the dominant impact of the benefit cut on employment was not driven by a contraction in the labor force —unemployed dropping out of the labor force because they were no longer entitled to benefits — but instead by those previously not participating in the labor market deciding to enter the labor force."
The authors of the study, Marcus Hagedorn of the University of Oslo, Iourii Manovskii of the University of Pennsylvania and Kurt Mitman of Stockholm University, discovered that states that had high unemployment benefits were also the ones in which joblessness grew fastest.
Hat tip: Fox News