Can Unemployment Insurance Keep Unemployment Rates High?

See The Wages of Unemployment: A new study shows how jobless insurance increased joblessness, an editorial from the WSJ, 10-18-13. Excerpts:

"A striking new study from the National Bureau of Economic Research concludes this is a mistake. Longer-term unemployment insurance, rather than supporting a recovery, likely makes unemployment persist.

"Most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility""

"...they were able to compare results in counties that adjoin but that sit in separate states."

"Places with more unemployment generosity remained worse off than those with less. Unemployment, the economists write, "rises dramatically in the border counties belonging to the states that expanded unemployment benefit duration" compared to the counties next door. The benefit extensions can explain "most of the persistently high unemployment after the Great Recession.""

"The real problem is job creation. There isn't enough of it, and so unemployment gets stuck at a high level. What brings unemployment down is not mainly the effort made by people to find jobs; instead, it's the incentive employers have to create jobs. Long-term unemployment benefits deter that job creation.

The reason is that extended unemployment benefits create upward pressure on wages. The higher wage level reduces the employer's potential profits on any new job created, so naturally they don't create them. With fewer jobs available, the number of unemployed who land a job also stays low. High unemployment persists."