A job seeker fills out an application form during a restaurant and hospitality career fair in Torrance, California, on June 23, 2021.
Eric Thayer/Bloomberg via Getty Images
State withdrawals from pandemic-era unemployment programs aren’t speeding up the job recovery, according to a new analysis.
Twenty-five states have ended their participation in at least some of the programs since mid-June. Louisiana, will do so July 31.
Those measures offered aid to the long-term unemployed, gig and other workers ineligible for traditional state benefits and raised pay by $300 a week.
State governors, largely Republicans, said the federal funds were keeping recipients from looking for jobs, making it harder for businesses to hire and holding back the economic recovery.
However, Census Bureau data suggests recipients didn’t rush to find jobs in the weeks following the first batch of state withdrawals, according to Arindrajit Dube, an economics professor at the University of Massachusetts Amherst.
Specifically, the share of adults receiving unemployment benefits fell sharply (by 2.2 percentage points) in the dozen states that cut federal funding on June 12 or 19, according to Dube. That translates to a 60% reduction in unemployment rolls in those states, he said.
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But there wasn’t a corresponding increase in employment among this group — in fact, the share of adults with a job fell by 1.4 percentage points over the same period, according to Dube. (Employment rose by 0.2 percentage points in states that didn’t end the pandemic benefits.)
Together, the data shows there wasn’t an immediate job boost following the cuts, Dube said. However, more time and information are needed to analyze the longer-term effects of state policies, he said.
“There’s not early evidence [federal benefits] were a big constraint [on jobs],” according to Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research, who reviewed the findings.
The analysis uses most recent data on 18- to 65-year-olds from the Household Pulse Survey, which is available through July 5. The Census Bureau releases new survey data every few weeks. It’s among the only real-time publicly available information sources that measures both employment status and receipt of unemployment benefits, Dube said.
His findings are in line with recent analyses published by the job site Indeed, which found job-search activity was muted in the states that cut federal benefits. That’s the opposite of what would be expected given the policy goal, company economists said.
“You could argue, maybe it will take people longer to find jobs than a couple weeks,” Houseman said. “We’ll have to continue to track [it].”
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