Limit unemployment benefits to one year: Nobel economist

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Unemployment benefits should be limited to a maximum of one year to ward off long-term joblessness and states should subsidise work instead, the new Nobel Economics laureate said Tuesday.

"I would strongly advise the governments not to allow long-term unemployment to build up by providing direct subsidised work experiences to unemployed after nine to twelve months of unemployment," British-Cypriot economist Christopher Pissarides told AFP on the sidelines of a conference in Stockholm.

"In recession times of course you might extend the period (of unemployment benefits) a little because there are not enough jobs, but not too much," the 62-year-old labour market expert said.

Pissarides was awarded the 2010 Nobel Economics Prize last month with two Americans, Peter Diamond and Dale Mortensen, for their work to resolve puzzles such as why people remained unemployed despite a large number of job openings.

The London School of Economics professor, who on Tuesday was taking part in a conference on how the global economic crisis has impacted the labour market, stressed the importance of work experience for landing a job.

But, he insisted, the "work experience should be in real jobs, not in made-up jobs just for the sake of (getting people) out of their home".

For example, Pissarides suggested that governments subsidise jobs usually held by women on maternity leave.

Pissarides also warned governments to be tough on people who could not be bothered to work.

"I don't think unemployment benefits should be given to those who generally don't want jobs. They should be given to people who want a job but can't find it," Pissarides said.

© 2010 AFP

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