The Incidental Economist

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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