Enhanced Unemployment Insurance Benefits in the United States during COVID-19: Equity and Efficiency
This paper concludes that the substantial COVID-19 unemployment insurance expansion had limited disincentive effects on job searches, particularly among lower-income individuals, despite high wage replacement rates.
The paper examines the impact of enhanced unemployment insurance (UI) benefits in the U.S. during COVID-19, finding that these benefits reversed increases in household income inequality that would have otherwise occurred in 2020 and 2021.
The $600 weekly UI supplement provided high replacement rates, especially for low-wage workers, and improved equity with minimal negative effects on job search, particularly among lower-income households. Expanded UI effectively reduced inequality and poverty during the pandemic, with only moderate impacts on job-finding rates, mainly among higher-income groups.
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