Peter Orszag makes the case for Germany
"We don’t really have a jobs policy," writes Paul Krugman. "We have a G.D.P. policy." Unlike Germany, we have not prioritized keeping workers in their jobs. Instead, we've prioritized measures to increase economic growth. As Larry Summers said, “It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.”
But has anyone told Peter Orszag? In his speech at New York University, Orszag made an argument that sounded like a very effective brief for devoting significant resources to protecting workers from layoffs:
Consider the effect of what economists call an "exogenous labor shock" -- but normal people call a "lay-off" -- on the life course not of those laid off … but on their children.
A range of studies have found that having a parent experience unemployment is significantly associated with whether you graduate from high school, whether you go to college, whether you get a job after college, and how much you get paid in that job. And the effect is persistent -- with higher high school dropout rates and lower college enrollment rates evident even years later.
Reflecting this, the children of workers who were once laid off have lower average wages as adults -- even decades later -- than those whose parents never experienced such setbacks.
Photo credit: Andrew Harrer/Bloomberg.
Posted by: ajw_93 | November 13, 2009 4:13 PM | Report abuse
Posted by: kordsmicah | November 13, 2009 4:57 PM | Report abuse
Posted by: umesh409 | November 13, 2009 5:12 PM | Report abuse
Posted by: JonathanTE | November 14, 2009 7:38 PM | Report abuse
Posted by: carbonneutral | November 14, 2009 8:38 PM | Report abuse
Posted by: redscott | November 16, 2009 9:34 AM | Report abuse
The comments to this entry are closed.