One of the ways the government can cushion the unemployed worker is to pay him/her unemployment benefits. If the government pays these benefits to an unemployed worker, it reduces the marginal private search costs of the unemployed. Why then could such payment lead to prolonged unemployment.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter7: Unemployment And Inflation
Section: Chapter Questions
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One of the ways the government can cushion the unemployed worker is to pay him/her unemployment benefits. If the government pays these benefits to an unemployed worker, it reduces the marginal private search costs of the unemployed. Why then could such payment lead to prolonged unemployment.

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