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Research found that reducing unemployment benefits did not bring people back to work

Job seekers complete the application form at the Restaurant and Hospitality Employment Information Session held in Torrance, CA on June 23, 2021.

Eric Sayer / Bloomberg via Getty Images

New analysis shows that the state’s withdrawal from the pandemic-era unemployment program has not accelerated employment recovery.

Since mid-June, 25 states have ceased participation in at least some programs. Louisiana, do so on July 31st.

These measures provided assistance to long-term unemployed, gig workers and other workers who were not eligible for traditional state benefits and raised $ 300 a week in wages.

The governor, primarily Republicans, said federal funding was preventing recipients from looking for jobs, making it harder for businesses to hire and curbing economic recovery.

However, according to data from the Census Bureau, recipients rushed to find a job in the weeks following the first batch of state withdrawals, according to Arindrajit Duvet, a professor of economics at the University of Massachusetts Amherst. ..

Specifically, according to Dube, the percentage of adults receiving unemployment benefits fell sharply (2.2 percentage points) in 12 states that cut federal funding on June 12 or 19. This means that the unemployment rate in these states will be reduced by 60%, he said.

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However, there was no corresponding increase in employment among this group. In fact, according to Dube, the proportion of adults working during the same period decreased by 1.4 points. (In states that did not end the benefits of the pandemic, employment increased by 0.2 percentage points.)

In summary, the data show that employment did not increase immediately after the cut, Duvet said. But he said more time and information would be needed to analyze the long-term impact of state policy.

“There is no early evidence [federal benefits] It was a big constraint [on jobs]”According to Susan Houseman, research director at the WE Upjohn Institute for Employment Research, who reviewed the findings.

The· analysis Use the latest data from 18 to 65 years old Household pulse survey, Available until July 5th. The Census Bureau releases new survey data every few weeks. According to Duvet, this is one of the public, real-time sources of information that measures both employment status and receipt of unemployment benefits.

His findings are consistent with recent analysis published on-site by Indeed. Job hunting has been muted In states that reduce federal interests. According to the company’s economists, this is the opposite of what is expected given policy goals.

“You can argue, maybe it will take more than a few weeks for people to find a job,” Houseman said. “You need to keep track [it].. “

Employment market

Following the employment report in April, the story of labor shortage began in earnest.U.S. economy Added 269,000 new jobs that month were about a quarter of what economists predicted. (Since then, employment growth surged to 850,000 in June.)

A major deviation from economists’ forecasts in recent months suggests that the labor market isn’t functioning as it did before the pandemic, according to Stan Wooger, a senior researcher at the American Enterprise Institute, a right-wing think tank. ing.

He said the expansion of unemployment benefits would likely have led at least some people to stay home instead of looking for a job.

However, many other effects are likely to play a role as well, Wooger said. He said Covid’s health risks remain. School schedules can make it difficult for parents to find a stable job. Workers who have moved may not have moved yet. The decimated industry will take some time to rebuild.

Concerns about the coronavirus, according to recent reports, are the number one reason for the lack of urgency to find a job among the unemployed. Research Certainly implemented.Increased cases due to delta variants Can be complicated Economic recovery.

“I think there are many of these pandemic-related implications that we don’t know about,” Wugger said. “We will not soon return to the old equilibrium.”

The state is also re-imposing the requirement to look for a job as a condition to receive unemployment benefits, making it difficult for people to use the system, Hausmann said. The state suspended these requirements early in the pandemic.

“They don’t make it exactly easy for people to collect these benefits,” she said.

But there are several reasons to wait for more data before drawing conclusions about the state’s unemployment policy, Wooger said.

For example, Dube’s analysis does not control differences in the employment market in each state. States that terminated federal benefits early also tend to reopen early after the blockade of Covid. Therefore, job discovery can be lower than in other states if some of the easier-to-recover jobs have already been done, Wooger said.

Dube states that his study did not control state factors, but was confident in the results because there was no “systematic difference” between these state groups over the past few months. ..

Census Bureau data also show an increase of nearly 4 percentage points in self-reported financial difficulties in states that have terminated or reduced pandemic unemployment benefits, Dube found.

“If it’s easy to move and get another job, the number of hardships shouldn’t change that much,” he said.

Research found that reducing unemployment benefits did not bring people back to work

Source link Research found that reducing unemployment benefits did not bring people back to work

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