• Unemployment benefits and migration in the US

    This post generated a lot of controversy due to a misunderstanding of the question raised. I am not asking about why people from Nevada don’t move to North Dakota. I am and was never interested in that specific question. If you still think that’s what this post is about you’re misreading it. Also, I consider this post obsolete, an answer to the question posed is here.

    Ezra Klein wrote an interesting post on unemployment benefits programs and how they apply across the states.

    [A]nd the 99 weeks you always hear about are only available in states where the unemployment rate is above 8.5 percent […] about half of them.

    There are three unemployment insurance programs right now: Basic Unemployment Insurance, Emergency Unemployment Compensation and Extended Benefits. The latter two are the extension programs. And they’re mindful that we’re not seeing the same rates of joblessness all across the country. North Dakota, for instance, has a very low unemployment rate. It doesn’t make sense to have 99 weeks of unemployment benefits in a state where unemployment is 2.8 percent. That’s when unemployment benefits really do discourage work.

    But it does make sense to have 99 weeks in Nevada, where the unemployment rate is 13.7 percent. That’s a state where the problem is too few jobs, not too few workers willing to take jobs. And that’s basically how the three-tiered unemployment insurance system is working: States with high unemployment are getting very long extensions, while states with lower unemployment are getting less. [Bold mine, just to emphasize that Klein picked out ND and NV, not me.]

    I wonder to what extent UI benefits discourage migration. Just to continue with the specific states Klein mentioned, North Dakota could use some workers. Nevada has too few jobs. (Yes, there are other states with above and below-average unemployment levels.) Yet we’re paying people in Nevada and other high-unemployment states whether they have a job or not. I doubt many would move to North Dakota or any other low-unemployment state anyway. Paying them not to makes it less likely. But how much less likely? (I’m asking the general question: how do UI benefits affect migration? I’m not asking about North Dakota and Nevada specifically.)

    Don’t get me wrong. I’m not suggesting there’s anything wrong with the UI benefits programs. I’m asking a question. I don’t know the research here. How many workers would move from high unemployment rate states (like Nevada) to low unemployment rate states (like North Dakota) in the absence of or with less generous UI programs?

    No guessing. I’m asking for research. My quick search revealed more about the EU than the US.

    UPDATE: There appears to be some confusion, that I was asking specifically about North Dakota and Nevada, not a general question about the effect of UI on migration in the US. So, I updated the post with (what might appear to some readers to be redundant) emphasis that it was a general question. Also, the “quick search” I spoke of was a Google Scholar search. Yes, I did one. Though I didn’t say so, I also e-mailed some others who I thought might know this area. What I heard back was that this is more intensively studied in the EU and less so in the US. Nobody (yet) has pointed to US-focussed research on the general question. It may not exist, but, as I said, I don’t know. I regret that I had to close comments on this post, but the volume of discussion contributions in violation of the comments policy was too high.

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    • Also, why does North Dakota have such a low unemployment rate?

      There’s an oil boom going on up there. It’s the point where incoming workers can find jobs but little in the way of permanent shelter.

    • It’s not just unemployment benefits though that might hinder movement – lots of folks in Nevada have the problem that they can’t sell their houses for what they still owe on them.

    • Ever heard of the Census?

      ND: 300K workers.
      Nevada: 1.2 million.

      ND could absorb, at most, a few thousand of the ~170K unemployed in Nevada?

      • The mention of ND and NV was not to imply that the former could absorb the latter. Wasn’t it clear I was seeking some actual studies (by which I mean peer reviewed, data-driven, analysis) on the general issue? Regular readers know how this blog works. It’s not about anecdotes and one-off examples. It’s about solid evidence.

    • It shouldn’t hinder movement at all. Once you’ve qualified for unemployment in one state, you’re able to collect even when residing in another. Recently, a friend of mine lost his job just after he moved to Texas from NY. He continued to collect UI under NY, since that’s where he qualified. I also know numerous people who live in NYC, but worked in NJ, and therefore collect benefits from across the river.

      So the answer is simple: UI doesn’t discourage migration at all.

    • To summarize: ND is having an energy boom. NV has too large a population in comparions to ND to make migration a feasible way of reducing unemployment. The inability to sell (or only sell for a huge loss) is probably a greater barrier to migration.

    • Austin,

      Maybe you could take a crack at this one:

      http://www.google.com/publicdata?ds=usunemployment&ctype=l&strail=false&nselm=h&met_y=unemployment_rate&scale_y=lin&ind_y=false&rdim=state&idim=state:ST270000:ST380000:ST460000&tstart=631152000000&tunit=M&tlen=249&hl=en&dl=en

      If unemployment is persistently higher in Minnesota, why aren’t people moving from there to North or South Dakota?

      Again, 1.4 million people in the Dakotas *combined* versus 5.3 million people in Minnesota. Perhaps the 10 or 20 thousand jobs available in ND and SD won’t make a dent in Minnesota’s 150k unemployed.

    • I’m sympathetic to your desire to ask a broader question, but if you’re going to ask a question based on an example, why not pick a reasonable example?

      • @mistermix – Good. Let’s go bigger and move on. What about the general question of the impact of UI on migration, controlling for all else of relevance (age, dependents, industry, home ownership, status of assets, marital status, age of kids, school system, proximity of family, social and community networks, etc.)? What are the key studies on this topic as it pertains to the US, as opposed to the EU which seems to be the focus of most recent work?

        If you can point me to such a study, I’d be delighted. Were this an area of research for me, I’d find some data and do my own work. But it isn’t. Since many researchers read this blog, it is not uncommon for me to ask the community about things I’m curious about. That’s, in part, what this blog is for.

        [The post has been updated and the comments are closed.]

        That Sullivan found the question worth citing is not my concern, nor is how you wish to characterize my curiosity on your blog. We may each choose to encourage or suppress asking questions and seeking evidence-based answers to whatever extent we wish. You do it your way, I’ll do it mine.

    • The post has been updated, based on reader feedback. The comments are now closed.