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The Boston Globe


edward l. glaeser

Severance pay for the unemployed

On Dec. 29, the federal program to extend unemployment insurance benefits will end, unless Congress votes to renew it once again. Federal lawmakers have passed 10 such extensions since 2008, but the financial and social costs of paying people not to work are too high to justify extending the program indefinitely. Congress should go back to the 26-week limit that prevailed before the recession — but do so humanely, by giving a single, sizeable lump-sum payment to those whose benefits run out in December.

Unemployment insurance has two upsides. The main one is that people who are laid off suffer a little less, which also makes people who still have jobs feel more secure. A secondary advantage, widely touted at the low point of the recession, is that unemployment insurance gives cash-strapped people some extra money that they quickly spend — which in turn helps boost consumer spending and economic activity.

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