The $ 600 unemployment bonus didn’t work any less, Yale study finds

  • Economists at Yale University found no evidence that Congress benefited from the $ 600 weekly unemployed reduced in March.
  • The Chicago Fed also found a similar trend in June 2020.
  • The findings directly challenge a claim made by Republican lawmakers and members of the Trump administration that the payment of additional unemployment undermined people’s desire to re-enter the workforce.
  • The expanded benefit from the CARES Act, which provides a $ 2.2 trillion stimulus package in March, is set to expire on July 31.
  • For more stories visit the Business Insider homepage.

A report by Yale University economists found no evidence that employment in the U.S. declined due to the COVID-19 outbreak, a $ 600 weekly unemployment benefit authorized by Congress in March.

The findings suggest that overall, the expanded benefits “neither encourage layoffs during the onset of the epidemic nor prevent people from returning to work to resume occupations.”

“Workers experiencing major expansion in unemployment insurance benefits have returned to their previous jobs over time, at similar rates to others”. “We find no evidence that more lenient gains either disrupt work at the beginning of expansion or as firms see return to business over time. In future research, it will be important to assess whether the same results Catch when states move to reopen. “

The $ 600 per week unemployment benefit that millions of Americans received under the CARES Act in late July. This comes as members of the Trump administration have been critical of these benefits for unemployed Americans, claiming they dissuade people returning to work.

In June, White House economic adviser Larry Kudlow told CNN that the measure was a “disruptive” to work, adding that “we’re paying people not to work.”

In contrast, the study found no evidence that those receiving more generous benefits were less likely to return to work. Researchers concluded that workers who received large increases in unemployment benefits relative to their wages did not experience a greater decline in employment after the CARS Act was enacted.

Researchers used weekly data from Homebase, a company that provides time-sheet software and schedules to small businesses across the US

“Statistics do not show an association between benefit leniency and employment paths after the CARES Act, which may have been due to the collapse of labor demand during the COVID-19 crisis,” by Thomas DeWitt Cuelez’s economics professor Joseph Eltonji said. Faculty of Arts and Sciences, and co-author of the report.

According to MarketWatch, the Federal Reserve Bank of Chicago found a similar trend. The study, published in June 2020, states, “Those who are currently receiving benefits are finding more than twice as fast as those who have exhausted their benefits. The Chicago Fed study also said The unemployment benefit usually lasts for six months, while on average individuals pay an average of 35% of their weekly salary from the prior week.

GOP lawmakers on Monday launched a $ 1 trillion stimulus plan that includes a second $ 1,200 direct payment for Americans.

The plan was initially rolled out on the Senate floor by Sen. Chuck Grassley of Iowa, in addition to provisions for another round of incentive payments, an expanded yet reduced unemployment benefit and more small-business loans. Allocated $ 60 billion.

These provisions would first need to be approved by the Democrat-controlled House of Representatives and signed into law before they would go into effect.

Democratic lawmakers have indicated a willingness to negotiate around exact numbers in the expansion of unemployment benefits.

“Look, it’s not $ 600 or bust,” House Majority Leader Stany Hoyer said in a recent interview. “Pelosi said the other day, which I felt is a great line: ‘We don’t have red lines, we have values.’ We are going into these negotiations with values. “

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