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Pt3_M10a_Student

by Joe Calhoun

Remember those secondary effects, the unintended consequences of government intervention we've been talking about? Beth's uncle’s choice is another good example. Unemployment benefits are meant to help people pay their bills while they seek a new job. That's a laudable goal. But the secondary effects we saw in the video show the frailty of human nature often comes into play, as Uncle Stan is essentially asking “Why work when you can collect a check and still do your own thing?” Uncle Stan didn’t set out to cheat, but the alignment of incentives has allowed him to figure out at least one way to effectively game the system.

Pt3_M10a_Student

Beth has lunch with her uncle. He will soon be unemployed. He takes a seasonal job of golfing for 6 months, so he is employed long enough to qualify for unemployment benefits. Then the rest of the year he can vacation while collecting unemployment.

from Module 10 Slice of Life (2014)
Creator: Common Sense Education International & the Florida State University Stavros Center for Economic Education
Posted by Joe Calhoun
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