The effects of prolonged unemployment benefits have turned into a controversial topic today. Unemployment benefits are income, according to the Social Security Administration. In a problematic economy, unemployment insurance also alters the incentives of the unemployed worker, lengthening his or her search for a new job.

Moreover, unemployment benefits could change workers’ mentalities that could lead them to be less driven and unhappier as their dependence on the government increases. With unemployment insurance, more and more people will opt for this compared to productive employment. When people remain unemployed, their decreased spending will slow down production in the entire economy, thus the state or country will be less sustainable.

In addition to these, unemployment insurance could create serious long-run effects called hysteresis or long-run unemployment. When a worker remains unemployed, his or her skills could become obsolete and the probability of remaining unemployed will increase. Moreover, production and employment will fall and will result to a less-skilled workforce. Extending unemployment insurance is likely to increase unemployment periods. While unemployment benefits were created to help workers who lost their job without their fault survive, they could have an effect that could damage the economic productivity and development of a certain country.

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