At the outset of the coronavirus pandemic earlier this year, millions of U.S. workers lost their jobs. In March, the U.S. Congress took notice and decided that the 26 weeks of Unemployment Insurance typically provided by states were not enough for an employment crisis that would likely extend beyond 6 months. Through the new Pandemic Emergency Unemployment Compensation program, it provided people who lost jobs through no fault of their own with an additional 13 weeks of benefits.
Today, coronavirus cases counts are skyrocketing, hospitals are filling, businesses are closing, and long-term unemployment is surging. But some workers have already run out of benefits, and the PEUC program is set to expire on December 26, leaving 8.1 million workers without any income support.
But research released earlier this year by Adriana Kugler and Umberto Muratori at Georgetown University and Ammar Farooq at Uber Technologies Inc. shows that the effects of the PEUC expiration are likely to persist far into the future for workers whose benefits expire, and ripple through the U.S. economy to affect firms and workers searching for well-matched employment relationships.
It matters for firms and the broader economy as well. Farooq, Kugler, and Muratori take advantage of their dataset, which allows them to follow individual workers over time and also to see the full workforce of the firms with which they eventually find re-employment. Using these features of the data, they find that higher-quality firms are better able to recruit workers that have the abilities they need. This creates a chain reaction that spreads through the U.S. economy.
In this manner, the benefits of extended unemployment benefits ripple past a worker’s current situation to affect their future job prospects, the productivity of firms, and the experiences of workers across the economy.
Read the full article about COVID-19 unemployment benefits by Alix Gould-Werth at Equitable Growth.
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