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Wednesday, Oct 14, 2020

Do economists say that the coronavirus-related boost in unemployment payments disrupted the labor market?

Esther Tsvayg, Gigafact Foundry
no

A congressional committee noted that five studies of a temporary boost in unemployment benefits enacted in March found scant evidence that the payments disrupted hiring or economic recovery. The measure added $600 in weekly benefits nationwide to offset the impact of the coronavirus shutdowns, making benefits more generous than previous wages for two-thirds of those laid off, according to a University of Chicago study. One cited study, by Yale University researchers, said workers with higher benefits "returned to their previous jobs over time at similar rates as others."

Media reports about workers delaying returns to work because of more generous benefits are at odds with the data. Economists point out that the security of returning to a job likely outweighed the short-term boost to income (the extra payments expired in July).

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