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Reducing unemployment Will cash bonuses speed the return to work of unemployed people? A
Chapter 4, Problem 58(choose chapter or problem)
Reducing unemployment Will cash bonuses speed the return to work of unemployed people? A state department of labor notes that last year 68% of people who filed claims for unemployment insurance found a new job within 15 weeks. As an experiment, this year the state offers $500 to people filing unemployment claims if they find a job within 15 weeks. The percent who do so increases to 77%. What flaw in the design of this experiment makes it impossible to say whether the bonus really caused the increase? Explain.
Questions & Answers
QUESTION:
Reducing unemployment Will cash bonuses speed the return to work of unemployed people? A state department of labor notes that last year 68% of people who filed claims for unemployment insurance found a new job within 15 weeks. As an experiment, this year the state offers $500 to people filing unemployment claims if they find a job within 15 weeks. The percent who do so increases to 77%. What flaw in the design of this experiment makes it impossible to say whether the bonus really caused the increase? Explain.
ANSWER:Step 1 of 2
It is given that 68% of people who filed claims for unemployment insurance found a new job within 15 weeks. This percent increases to 77% when the state offers $500 to people filing unemployment claims if they find a job within 15 weeks.