Enhanced Unemployment Insurance Benefits in the United States during COVID-19: Equity and Efficiency
Robert Valletta and
Mary Yilma
No 2024-15, Working Paper Series from Federal Reserve Bank of San Francisco
Abstract:
We assess the effects of the historically unprecedented expansion of U.S. unemployment insurance (UI) payments during the COVID-19 pandemic. The adverse economic impacts of the pandemic, notably the pattern of job losses and earnings reductions, were disproportionately born by lower-income individuals. Focusing on household income as a broad measure of well-being, we document that UI payments almost completely offset the increase in household income inequality that otherwise would have occurred in 2020 and 2021. We also examine the impacts of the $600 increase in weekly UI benefit payments, available during part of 2020, on job search outcomes. We find that despite the very high replacement rate of lost earnings for low-wage individuals, the search disincentive effects of the enhanced UI payments were limited overall and smaller for individuals from lower-income households. These results suggest that the pandemic UI expansions improved equity but had limited consequences for economic efficiency.
Keywords: unemployment insurance; covid19; inequality; income support; job search (search for similar items in EconPapers)
JEL-codes: D31 J64 J65 (search for similar items in EconPapers)
Pages: 27
Date: 2024-05-06
New Economics Papers: this item is included in nep-lab
Note: First version: November 20, 2023. Minor revisions: December 2023, May 2024
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.frbsf.org/wp-content/uploads/wp2024-15.pdf Full text - article PDF (application/pdf)
Related works:
Working Paper: Enhanced Unemployment Insurance Benefits in the United States during COVID-19: Equity and Efficiency (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:98312
Ordering information: This working paper can be ordered from
reference.library@sf.frb.org
DOI: 10.24148/wp2024-15
Access Statistics for this paper
More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library (reference.library@sf.frb.org).