Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 28 - Part IX - Unemployment - Quick Check Multiple Choice - Page 605: 3

Answer

b. income uncertainty that workers face.

Work Step by Step

The goal of unemployment insurance is to allay income uncertainty in those who were laid off by giving them some payment. However, it can also cause a reduction in the search effort of the unemployed and thereby increase frictional unemployment. It makes unemployment less difficult, reducing the incentive to find employment quickly in the future.
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