Lowering unemployment compensation paid to laid-off workers will reduce unemployment by decreasing the amount of time workers are permitted to search for a job.

Question

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Lowering unemployment compensation can reduce the financial cushion for laid-off workers, potentially incentivizing them to accept new employment opportunities more quickly rather than holding out for better offers or more suitable positions. This can lead to a reduction in the duration of unemployment spells.

Lowering Unemployment Compensation Paid to Laid-Off Workers Will Reduce Unemployment