研究 The Governor’s choice: Continue or end exp和ed unemployment benefits?

12bet官方研究所 
 

Exp和ed UI benefits are set to expire on September 6, 2021. Although 26 states already ended exp和ed UI benefits in June 和 July, 8月19日，拜登政府 重申 that states can use their American Rescue Plan allocations to continue exp和ed UI benefits should they deem them necessary given local labor 和 public health conditions. 总监应该做什么? Below we summarize what we have learned about the benefits 和 costs of UI over the last 10 years.  

Unemployment Insurance is playing an important role in boosting spending, stimulating economic activity during the COVID recession. 我们在 最新报告 that the benefits of UI are consistently large, 和 even larger for low-liquidity 和 low income 家庭. 不管经济状况如何, families exhibit a high marginal propensity to spend their unemployment insurance benefits. 事实上, UI does a particularly good job of preventing spending cuts among low-liquidity 和 low-income families which, 反过来, reduces negative impacts on the local business economy. 在COVID 我们的文档 UI之外的大量支出反应, owing to higher benefit levels 和 the concentration of job losses among lower-income workers. Indeed UI benefits boosted the spending of 失业工人, even when the spending of the employed had fallen considerably. These spending impacts help create jobs, providing a boost to the economy that is still recovering.

Conversely, our previous 研究 on UI prior to the p和emic (JPMCI报告, 学术论文) suggests that spending drops considerably when UI benefits expire. 因此, it is reasonable to expect that we might observe a spending drop among 失业工人 who lose their UI benefits in September.

If the benefits of UI are consistently large, what about the costs?

9月6日, roughly one-third of UI benefit recipients will lose the supplement but still receive weekly benefits. 我们有 记录 that UI supplements do not appear to play a large role in deterring people from returning to work. Fluctuations in job finding among UI recipients when UI supplements are turned on 和 off are small compared to fluctuations we observe from other factors. Policymakers should consider additional reasons why employers state they are having a difficult time with employees returning to the office including the ongoing public health risk, 照顾孩子的约束, as well as insufficient pay or benefits.

The lion’s share of 失业工人—roughly two-thirds, including the long-term unemployed 和 gig workers—will lose their benefits entirely, 不仅仅是补充剂. The P和emic Unemployment Assistance program, which exp和ed UI coverage to gig workers 和 other groups, has been a significant addition to the economic safety net during COVID as it represents roughly 40 percent of total claims. As 我们将展示, it is providing meaningful income insurance for workers who appear to be lower-income 和 younger than traditional UI recipients. 也就是说，在之前的工作中， 我们已经记录了 a 38 percent increase in job-finding when 失业工人 lose their UI benefits entirely. 因此 allowing UI benefits to lapse entirely, may indeed nudge some recipients back to work, but those losing full benefits are likely to be lower-income, 经济上更脆弱的工人.

A 最近的一篇论文 helpfully compares in dollar terms the large spending drops against the small employment gains occurring in a number of states that turned off exp和ed benefits over the summer: UI benefits for workers fell by $278 per week while earnings rose by just $14 per week, offsetting only 5% of the loss in benefits. 结果是, spending fell by $145 (20 percent) per week, as the loss of benefits led to a large immediate decline in consumption. 根据我们的 研究, this sensitivity of spending to the drop in income is a predictable response for lower-income 家庭, which makes up the bulk of that paper’s sample.

失业救济金, 伴随着三轮经济刺激, have helped boost not just spending but also cash balances for 失业工人 和 家庭 在一般情况下. 在每一轮刺激之后, 以及当UI补充剂被移除时, we observe cash buffers depleting faster for families with lower liquidity or incomes 和 for 失业工人, 分别, showing the importance of targeted support.

As policymakers continue to evaluate the best action to ensure a successful 和 inclusive recovery – targeted income supports continue to be an essential part of buoying consumer spending 和 household finances 和 their continuation should be strongly considered.