- Yale University economists found no evidence that a $ 600 weekly unemployment benefit authorized in March reduced employment.
- A similar trend in 2020. June Also found by the Chicago Fed.
- The findings directly challenge the oft-repeated claim by Republican lawmakers and members of the Trump administration that supplementary unemployment benefits have reduced people’s willingness to get a job again.
- Advanced CARES Act, which in March. Presented a $ 2.2 trillion stimulus package, the benefits expire on July 31st.
- To learn more stories, visit the Business Insider homepage.
A report by Yale University economists found no evidence that the $ 600 weekly benefits paid in March Congress approved a reduction in employment in the U.S. in response to the COVID-19 outbreak.
The results show that, in general, the extended benefits “neither encouraged redundancies in the event of a pandemic nor discouraged people from returning to work when business began to resume.”
“Workers facing higher unemployment benefits have returned to their previous jobs over time at similar rates as others,” economists said. “We find no evidence that richer incentives encourage work both at the beginning of expansion and when companies have wanted to return to business over time. In future research, it will be important to assess whether the same results apply when states relocate.”
At the end of July, the $ 600 a week in unemployment benefits that millions of Americans received under the CARES law will expire. This is because members of the Trump administration have been critical of these benefits for unemployed Americans, saying they do not encourage people to return to work.
White House economic adviser Larry Kudlow told CNN in June that the measure was a “deterrent” to work, adding that “we pay people not to work.”
In contrast, the study found no evidence that recipients of more generous benefits could return less to work. The researchers concluded that employment for workers who had an increase in unemployment benefits relative to their wages did not decline as a result of employment under the CARES Act.
The researchers used weekly data from Homebase, a company that provides timesheet software and scheduling for small businesses across the United States.
“The data do not show a link between the benefits of generosity and employment after the CARES law, which may be linked to the collapse in labor demand during the COVID-19 crisis,” said Joseph Altonji, economics professor at Thomas DeWitt Cuyler. Faculty of Arts and Sciences and co-author of the report.
According to MarketWatch, the Chicago Federal Reserve has set a similar trend. “Those who are currently collecting benefits are looking for more than twice as much as those who have used up their benefits,” according to a study published in 2020. June from their weekly salary from the previous week.
GOP lawmakers on Monday unveiled a $ 1 trillion stimulus plan that includes a second $ 1,200 direct payment to Americans.
The plan, originally introduced on the Senate floor by Elder Chuck Grassley of Iowa, additionally includes provisions for another round of incentive benefits, an extended but reduced unemployment benefit, and $ 60 billion in more small business loans.
These provisions should first be approved by the Democrat-controlled House of Representatives and signed into law before they enter into force.
Democratic lawmakers have expressed a willingness to negotiate the exact number when extending unemployment benefits.
“Look, it’s not $ 600 or a deposit,” House leader Steny Hoyer said in a recent interview. “Pelosi said the other day, which I thought was a great line: ‘We don’t have red lines, we have values.’ We are entering into these negotiations with values. “