Early data shows ending unemployment insurance didn’t boost employment

Unemployment insurance form

Many states seeking to fill vacant jobs with this strategy have not seen the results they sought.

Early US Census Bureau data shows that the push made by several states to end unemployment insurance in order to fill vacant jobs has not panned out as they wanted.

The elimination of the additional pandemic financial support didn’t increase employment numbers.

University of Massachusetts Amherst economics professor Arindrajit Dube used Household Pulse Survey data recently collected by the US Census Bureau to determine that bringing the pandemic-related unemployment insurance to an end did not bring about a boost in employment in the states that used the strategy. Several states sought to incentivise filling a sudden rise in available jobs by cutting off the additional financial support.

The Household Pulse Survey asked respondents whether they had received such payments within the prior seven days. Dube conducted an assessment of this data in order to determine the impact of ending the pandemic policies on receiving the benefits payments. Dube used the data to examine the short-term impact of the expiration of the programs in June. The survey also asked if the respondents were currently employed, which made it possible for Dube to evaluate the impact of the program expiration on employment. The most recent data in the survey was valid through July 5, 2021.

States ending their unemployment insurance early (June) saw a decline in employment by 1.4 percent.

During the same period of time, states that did not end their benefit payments in June saw a 0.2 percent increase in employment.

In Dube’s report on the analysis, he stated that in order to determine the long-term benefits of the strategy on the job market, additional time and data are both necessary. This will be particularly interesting in markets such as the hospitality industry as well as among small business owners. Those are areas in which positions have been difficult to fill, and some have claimed that the reason for this is the ongoing UI payments.

Unemployment insurance formThe findings in Dube’s report align with other recent analyses, including those published by the Indeed job site. That analysis determined that states that cut federal unemployment insurance benefits didn’t see the job-search activity displayed in those with ongoing benefits.

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