slowThan those that don’t. Steve England/Standard Chartered Bank:
source: Englander, “United States-So far, welfare cuts have nothing to do with job growth”, Global Research/Standard Chartered Bank, July 16, 2021.
From the newsletter:
We found evidence that cutting or eliminating federal benefits related to COVID reduced the number of people receiving benefits (see UI recipients decline in states where benefits are cut), but the state employment data from the Bureau of Labor Statistics (BLS) for June did not indicate higher employment growth in states that cut or are about to cut benefits (Figure 1). The states that cut benefits in the first round (Alaska, Iowa, Mississippi, Missouri) are significantly behind other states. The eight states that reduced benefits a week later also fell behind, but by a smaller margin.
…
We believe that this is a moderate disappointment for those who wish to see a huge and direct impact from the reduction in welfare, but due to the date of the investigation, the conclusion is very preliminary. On this score, the state data for July should be more clear.
A more detailed inspection confirmed that there was almost no evidence of any impact, providing Alindrajit Dube At this Blog post.
So what is the impact on the labor market so far? How does the policy change affect the number of people receiving UI benefits? Have these policy changes promoted employment in these states so far? Here, I use the latest data from the Household Pulse Survey (HPS) collected by the Census Bureau to assess the short-term impact of the June expiration. Specifically, HPS asked respondents whether they received UI within the past 7 days, which allowed us to assess the impact of policy expiration on receipts. In addition, HPS also asked respondents whether they are currently working, which allows us to assess the employment impact. The latest data is as of July 5, 2021.
…
Overall, the expiration of the pandemic UI in mid-June seems to have greatly reduced the proportion of the population receiving any unemployment benefits. But this does not seem to translate into most people finding a job within the first 2-3 weeks after expiration. However, there is evidence that reduced UI benefits increase the difficulty of self-reported payment of regular expenses. Of course, this evidence is still too early, and more data is needed to paint a more comprehensive picture.
