Working Paper

The Jobs Effect of Ending Pandemic Unemployment Benefits: A State-Level Analysis


Abstract: This note uses the asynchronous cessation of emergency unemployment benefits (EUB) in 2021 to investigate the jobs impact of ending unemployment benefits. While some states stopped providing EUB in September, other states stopped in June and July. Using the cessation month as an instrument, we estimate the causal effect on employment of reducing unemployment rolls. In the first three months following a state’s program termination, for every 100 person reduction in beneficiaries, state employment causally increased by about 35 persons. The effect is statistically different from zero and robust to a wide array of alternative specifications.

Keywords: COVID-19; unemployment; unemployment benefits; pandemic emergency unemployment benefits;

JEL Classification: J65;

https://doi.org/10.20955/wp.2022.010

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2022-04-24

Number: 2022-010