Another issue with the idea that people would voluntarily opt out of working in order to gain benefits to fund a search for new employment is that studies by Glynn and Booth have found that 73% of unemployed workers lived below the poverty line, which is higher than the employed workers. This means that it is unlikely that these workers will want to become unemployed if they know that they are going to have a low income and be below the poverty line. This problem is made even worse if they incorporate the effects on their wives and children. The extra benefits given to a unemployed worker to pay for the upkeep of the rest of his family were very low and probably not sufficient to keep them above the poverty line. Therefore, if a worker has a large family, the chances are they are less likely to indulge in search unemployment.
It is also possible to disaggregate the data into further groups, such as by age, sex or skill level. When this is completed, further evidence against the standpoint of Benjamin and Kochin is revealed. If we solely look at young women, they saw one of the largest increases in the replacement ratio of any group (when divided in this method) but one of the smallest increases in the unemployment rate. A similar but less significant result was found for women over 24. More importantly, if the data is restricted to the unskilled, the model is shown to be skewed, as unskilled people are more likely to be unemployed, but because of this likelihood, unskilled people receive more benefits in terms of their wage, plus their wages will be lower simply due to their lack of skill. This will mean that the model is skewed by the unskilled and if the sample is controlled for skill level and only includes male household heads, the effect of the replacement ratio become almost negligable.
Overall, I think that the reasons proposed by Benjamin and Kochin in the question has at best a minimal effect on the unemployment rate. The changes in the unemployment rate are much more likely to be causes by hysteresis after demand-side shocks, such as the return to gold in 1921 and the world slump in the 1929 to 1932 depression.
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