COVID Transfers Dampening Employment Growth, but Not Necessarily a Bad Thing

Abstract: Overall employment levels have remained below their pre-pandemic level and are growing only slowly despite rising wages and vacancies. In this Economic Brief, we examine whether historically high government support may have empowered workers to pull back from labor markets. While that support presents a clear benefit to recipients, a simple calculation based on recent estimates indicates that transfers of close to $2 trillion to households approved over the course of 2020 and 2021 implies a reduction of 0.58 percentage points in the employment-to-population ratio.

Keywords: COVID; employment;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2021-11

Volume: 21

Issue: 39