SF Fed Paper Suggests Unemp Benefits Have Modest Impact On Job Takeup

The San Francisco Fed has published a paper which sheds some light on the current debate over whether unemployment benefits are discouraging some recipients from accepting job offers.

• Using various data including Current Population Survey data and looking at the weekly $600 UI benefits paid under the CARES Act, they conclude there are "moderate disincentive effects of $600 supplemental payments on job finding rates; this empirical framework also suggests small effects of the $300 weekly UI supplement available during 2021".
• To put it in more concrete terms, the authors estimate that "each month in early 2021, about seven out of 28 unemployed individuals receive job offers that they would normally accept, but one of the seven decides to decline the offer due to the availability of the extra $300 per week in UI payments. This implies a small but likely noticeable contribution of expanded UI generosity to job-finding rates and employers' perceptions of worker availability in early 2021".
• These findings suggest that unemployment benefits may have played a small role in the weaker-than-expected April jobs report, and similarly contributes to the narrative that there may be a modest impact on jobs growth as the $300 weekly supplement expires in September.