States that reduced unemployment benefits did not see employment growth.
In an effort to speed up job searches, twenty-six states will eliminate their pandemic unemployment programs in 2021. According to research, the relocation has not resulted in increased employment.
Officials from the state said that the cash help was stopping unemployed people from looking for work.
However, according to Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, Census Bureau data suggests that recipients did not rush to find work after the first round of state withdrawals.
In fact, in the weeks after their withdrawal, the first states that withdrew funding saw no increase in job creation.
According to Dube’s research, “the share of adults having jobs declined by 1.4 percentage points over the same time.”
There is no indication that federal benefits prevent people from obtaining work, according to Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research.
“You could argue that it will take individuals more than a couple weeks to locate jobs,” Houseman told CNBC. “We’ll have to keep an eye on it.”
As early as mid-June, some states began terminating jobless benefits. The decision was made in the context of federal stimulus initiatives aimed at boosting the economy in 2021.
Republicans controlled the majority of the states that removed part or all federal unemployment insurance.
According to economists, the US economy has shifted during the pandemic. As more firms reopen, steady growth is projected.