Via The Daily Dish, I see Austin Frakt has some interesting thoughts about how unemployment insurance may be decreasing migration:
I wonder to what extent UI benefits discourage migration. North Dakota could use some workers. Nevada has too few jobs. Yet we’re paying people in Nevada whether they have a job or not. I doubt many would move to North Dakota anyway. Paying them not to makes it less likely. But how much less likely?
This reminds me of something I proposed awhile ago, which is to let the unemployed front-load their unemployment insurance if they use it to move. Here is what I wrote:
So what policies could we pass to make the unemployed better off and incentive them in a way that speeds up the structural unemployment adjustment process?
One idea is relocation vouchers. If you offer relocation vouchers to unemployed workers who move a minimum distance from their current residence, then you could incentivize labor to move where it is needed away from where it is no longer needed.
The demand for this type of voucher can be seen in the piece from Catherine Rampell on structural unemployemt that Avent was commenting on…
This is someone who could clearly be made better of by a moving voucher. In contrast, unemployment payments for her would do nothing to incentivize or even allow her to move, which would mean she remains in the labor market for which her skills are not needed at a salary she will accept.
One way to pay for this program would be to allow workers to front load their unemployment. Take a full three months worth of unemployment at once instead of spreading it out as long as the person can verify that they are relocating a minimum number of miles away from their current residence.
Obviously there are some problems with this. How do you ensure that movers weren’t going to move anyway? How to you monitor whether they are actually moving or if they are just going on vacation? Still, I think it’s worth consideration, as more labor mobility would do the economy good right now.