UI Generosity and Job Acceptance: Effects of the 2020 CARES Act

Nicolas Petrosky-Nadeau and Robert Valletta

No 2021-13, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We assess labor market effects of the CARES Act $600 UI supplement. We start with direct empirical analyses of labor force transitions using monthly CPS data and imputed UI benefits. The results show moderate disincentive effects of the supplement on job finding. We rationalize this result in a dynamic model of job acceptance decisions that yields a reservation level of UI benefits at which a recipient is indifferent between unemployment and employment at their prior wage. Calculations based on the model confirm that only a small fraction of recipients of the enhanced UI benefits were likely to reject job offers.

Keywords: Unemployment; unemployment insurance; job acceptance; COVID-19; CARES Act (search for similar items in EconPapers)
JEL-codes: J64 J65 (search for similar items in EconPapers)
Pages: 41
Date: 2024-04-12
New Economics Papers: this item is included in nep-ias and nep-lab
Note: This paper includes a significant expansion of content released in an earlier working paper by Petrosky-Nadeau (FRBSF Working Paper 2020-28, August 2020), “Reservation Benefits: Assessing Job Acceptance Impacts of Increased UI Payments."
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Citations: View citations in EconPapers (6)

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Working Paper: UI Generosity and Job Acceptance: Effects of the 2020 CARES Act (2021)
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DOI: 10.24148/wp2021-13

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