Unemployment Insurance and Unemployment Spells

There was an odd article about the latest Nobelists in the Washington Post today. Jeannine Aversa, Louise Nordstrom and Karl Ritter write:

Some Republicans argue that extending unemployment benefits – as Congress has done on multiple occasions since the recession – can actually make unemployment worse by taking away the incentives to finding work. Liberal economists dismiss that.

The article goes on to rightly take Senator Richard Shelby (R-AL) to task for claiming that one of the Nobelists, Peter Diamond, is unqualified to serve on the Federal Reserve.

Then, a few paragraphs from the end, we learn:

Taken together, [the Nobelists’] work has suggested, for instance, that unemployment benefits can have the unintended consequences of prolonging unemployment. That’s because the aid can make it less costly to be out of work – even as it improves employers’ chances of finding the right workers, as Diamond’s research concluded.

Diamond wrote that workers “become more selective in the jobs they accept” because of the employment aid. In the long run, he found, that makes for better matches and increases the economy’s efficiency because companies and workers are better suited to one another.

But I thought only Republicans believed that unemployment benefits prolong periods of unemployment?

Here is how I might have characterized it:

Some Republicans argue that extending unemployment benefits – as Congress has done on multiple occasions since the recession – can actually make unemployment worse by taking away the incentives to finding work. This is a standard result in labor economics, one that is supported by the left-leaning economists who won the Nobel Prize on Monday. But not everyone thinks this is a bad thing. Diamond, for one, has argued that while unemployment benefits may extend the period of unemployment, they may result in better matches, increasing the economy’s efficiency.