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1. Direct hiring into government jobs. The stigma of long term unemployment may be ameliorated by a short run jobs program that recruits the long term unemployed to assist with the normal functions of government. This may allow individuals to look for a new job while employed, a change that may have a large impact on placement.
2. Policies directed at geographic mismatches. These might include improved empowerment zones, and possibly programs to assist workers as they move from areas with weak labor markets to areas with strong labor markets.
3. Privatized training. Our government training programs are a national embarrassment, and the unemployed would be better off if the monies were available to individuals who themselves chose the skills they wish to acquire.
4. Work subsidies. Programs that provide employers with tax incentives to employ the long-term unemployed may encourage them to hire them.
5. Work Share programs. The U.S. currently has some programs that allow employers to cut hours of workers in downturns and let them receive some unemployment insurance, but they are very little used.
1. As Hassett said, “This is an area that is crying out for policy experiments that can be rigorously evaluated.” I don’t think policymakers, especially on the center right, should quickly rule in or out anything — especially since the long-term unemployed are a sort of special case where a rising tide may not lift all boats (or at least not so quickly given deteriorating skills or workplace bias).
2. A March paper co-authored by David Neumark is encouraging on the use of tax policy:
This paper provides evidence on the effect on job growth of hiring credits adopted during the Great Recession. For many of the types of hiring credits we examine we do not find positive effects on job growth. However, some specific types of hiring credits – including those targeting the unemployed and those that allow states to recapture credits when job creation goals are not met – appear to have succeeded in boosting job growth.
3. Reihan Salam offers some thoughts on direct employment programs.
4. Ezra Klein is mildly skeptical on German-style work-share programs.
5. Enrico Moretti has suggested the unemployed in areas with above-average unemployment rates should receive part of their unemployment insurance check in the form of a relocation voucher to help with moving expenses.
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