One of the fundamental claims made about North Carolina’s cuts to unemployment insurance payments was that such a policy change would create a greater incentive for jobless workers to take available jobs and employment in the state would rise as a result.
The Economic Policy Institute (EPI) posted a great graphic once again demonstrating that there is no evidence to suggest such a causal effect on employment from unemployment insurance cuts. In this case, researchers at EPI compare North Carolina’s employment levels to our neighbors who are likely to have experienced similar macro-economic conditions. Their finding:
As the graph shows, North Carolina’s prime-age EPOP (employment to population ratio) began rising rapidly in the months prior to the duration cutback, began falling steadily just two months after the duration cutback, and differed very little in behavior after the cutback from prime-age EPOPs in surrounding states.
Bottom-line: North Carolina’s labor market has not improved as a result of unemployment insurance cuts.