Reducing unemployment. Will cash bonuses speed the return to work ofunemployed people? A

Chapter 0, Problem 9.4

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Reducing unemployment. Will cash bonuses speed the return to work ofunemployed people? A state department of employment security notes that last year 68% of people who filed claims for unemployment insurance found a new jobwithin 15 weeks. As an experiment, the state offers $500 to people filingunemployment claims if they find a job within 15 weeks. The percent who do soincreases to 77%. Explain why confounding with lurking variables makes itimpossible to say whether the treatment really caused the increase.

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