How Did Pandemic UI Benefits Affect Employment Recovery in Local Industry Markets?

Andreas Hornstein, Marios Karabarbounis, André Kurmann and Etienne Lalé ()

Richmond Fed Economic Brief, 2022, vol. 22, issue 44

Abstract: We analyze the employment recovery of low-wage establishments relative to the employment recovery of high-wage establishments within local labor markets, and we find a slower recovery in low-wage establishments. We associate the difference with the expanded generosity of pandemic unemployment insurance (UI) supplements, which have a larger negative effect on the job-filling rate of low-paying establishments. We use a model of labor search to translate our establishment-level observations into a disincentive effect of pandemic UI benefits at the worker level.

Keywords: COVID 19; Unemployment Insurance (UI); labor market; low-wage labor markets (search for similar items in EconPapers)
Date: 2022
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