Last summer, various concerns about labor shortages, reportedly due to extended pandemic unemployment insurance programs under the American Rescue Plan, caused Republican governors in 18 states to withdraw early in June from the unemployment insurance programs, which were set to expire in September. This paper aims to research the labor market outcomes of states that withdrew early and how they compare to the labor market outcomes of states that retained the programs until their expiration date. In order to complete this research, I gathered data on four labor market outcomes: job openings, hires, quits, and layoffs and conducted a statistical regression, controlling for covid cases and severity of lockdown policies, to measure the effect of withdrawal on each of the four outcomes. The results of my regression show a positive effect of withdrawal on the four outcomes. The results are also consistent with existing literature on the topic, which finds an increase in employment in the states that withdrew early from the unemployment insurance programs.
Early Withdrawal from Extended Pandemic Unemployment Insurance and its Effect on Labor Market Outcomes
- Fellow: Gabriel Garcia
- Advisor: Jennifer Hunt