One of the ways the government can cushion the unemployed worker is to pay him/her unemployment benefits. If the government pays these benefits to an unemployed worker, it reduces the marginal private search costs of the unemployed. Why then could such payment lead to prolonged unemployment.

Survey Of Economics
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ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter12: Business Cycles And Unemployment
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One of the ways the government can cushion the unemployed worker is to pay him/her unemployment benefits. If the government pays these benefits to an unemployed worker, it reduces the marginal private search costs of the unemployed. Why then could such payment lead to prolonged unemployment.

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