Sunday, December 19, 2010

Volokh Corrections #28 and #29: Adler should study environmental groups, Lindgren should review abstracts more carefully

Several weeks ago I was listening to Environmental Defense Fund's Insider Podcast where they described how their advocacy of "catch-shares" for commercial fisheries (allocating a percentage of fish caught to individual fishermen, instead of a quota) has created an ownership interest among fishermen that supports sustainable fishing. It was also a short time after the election where the California electorate preserved our premier climate change law, ratifying the way for the second-largest cap-and-trade market in the world to begin functioning in 2012.

About the same time, Jonathan Adler is writing about the "decline of the environmental movement" as it supposedly veers off course. Personally, I'm not surprised that environmental concerns played a lesser role than economic ones in the worst economy since the 1930s. Even then, climate legislation got further at the national level than it previously had in 10 years, California and other states move forward, the EPA will take its own actions on climate, and environmental groups continue to innovate. Adler could benefit from undertaking some research on these issues.

And more recently, Jim Lindgren complains about the pernicious effect of long-term unemployment benefits, quoting a study as finding "a 0.4% increase in the unemployment rate because of extending benefits for up to a total of 99 weeks." What he missed in the study is its main conclusion, that:

Analysis of unemployment data suggests that extended unemployment insurance benefits have not been important factors in the increase in the duration of unemployment or in the elevated unemployment rate.

Yes, it also found a 0.4% increase in unemployment from extending benefits, but that is minor in comparison to the real factors driving long-term unemployment. This makes clear the level of hardship Lindgren and friends would impose on people who are jobless and are sincerely looking.

There's also a bias in the study that suggests the 0.4% figure doesn't represent slackers. The study authors can think of two reasons why extending benefit durations could increase unemployment:

First, the extension of UI benefits, which represents an increase in their value, may reduce the intensity with which UI-eligible unemployed individuals search for work. This could occur because the additional UI benefits reduce the net gains from finding a job and also serve as an income cushion that helps households maintain acceptable consumption levels in the face of unemployment shocks (Chetty 2008). Alternatively, the measured unemployment rate may be artificially inflated because some individuals who are not actively searching for work or who are unwilling to take available jobs are identifying themselves as active searchers in order to receive UI benefits.

A third possibility is the rate is artificially inflated because people who would've given up in the absence of UI benefits accept the condition placed on receiving benefits, that they seek actively seek work and would accept jobs. They're not liars, and no one is being harmed by extending their benefits.

So just like Adler, Lindgren might benefit from studying the subject he's writing about more closely.

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