Journal Article

Increasing Employment by Halting Pandemic Unemployment Benefits

Abstract: In mid-2021, 26 states halted participation in all or some federal emergency unemployment benefits (EUB) programs before those programs' federal funding lapsed. This article uses this asynchronous EUB cessation between early- and late-halting states to estimate the causal impact of benefit cessation on employment. We find that cessation increased employment by 29 persons for every 100 (pre-halt) EUB recipients. Expressed as a number of jobs, if all states had halted EUB in June, September employment would have been 3.4 million persons higher relative to a no-halt counterfactual. Late-halting states could have significantly accelerated their states' jobs recoveries in the second half of 2021 through early program cessation.

Keywords: COVID-19; employment; unemployment benefits;

JEL Classification: E24; J65;

https://doi.org/10.20955/r.104.166-77

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Review

Publication Date: 2022-07-14

Volume: 104

Issue: 3

Pages: 166-177