This paper provides a critique of the "unemployment invariance hypothesis", according to which the behavior of the … labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity, and … equilibrating mechanisms to ensure unemployment invariance and that other markets may perform part of the equilibrating process as …

excessively high and their employment excessively low. These inefficiencies are usually magnified through unemployment benefit …. The employment vouchers considered here reduce unemployment and impose no cost on the government, since they are financed … by the induced fall in government expenditures on unemployment benefits. Among other things, we find that young workers …