Question

Would cash bonuses speed the return to work of unemployed people? A state department of labor notes that last year 41% of people who filed claims for unemployment insurance found a new job within 15 weeks. As an experiment, the state offers $500 to people filing unemployment claims if they find a job within 15 weeks. The percent who find a job increases to 53%.

Select the condition(s) that might make it easier or harder to find a job this year as opposed to last year. Confounding with these lurking variables makes it impossible to say whether the treatment really caused the increase.

1. A company's profit margin

2. Hiring costs to companies

3. The general state of the economy

4. an individual's age

5. an individual's health

Number 3 is correct, but there is another one.

Answer 1

Out of these five variables, you are right that the general state of the economy could have improved which led to more jobs this year. Another variable can't be associated at an individual level which is age or health as these can't improve drastically in one year. Hence, another variable in my opinion could be the hiring costs to the companies. There might be some stimulus from the government which could be some kind of tax incentives to hire more workers. There could also be any major decisions which might have led to a decrease in the hiring costs to the companies. Hence, this variable could be a lurking variable.

Therefore, B and C are the correct choices.