1. In a recent study for the National Bureau of Economic Research (NBER), four researchers looked at the effect of generous unemployment benefits on the local unemployment rate. They compared the...

1. In a recent study for the National Bureau of Economic Research (NBER), four researchers looked at the effect of generous unemployment benefits on the local unemployment rate. They compared the unemployment situation in adjoining counties, which happened to lie in two different states with different laws regarding the amount and duration of unemployment benefits. The authors of the study found that the unemployment rate “rises dramatically in the border counties belonging to the states that expanded unemployment benefit duration” during the Great Recession. Why might this be so? (Based on Haledon, Karajan, et al., “Unemployment Benefits and Unemployment in the Great Recession: The Role of Macro Effects.” NBER working paper 19499, October 2013.)