Is the unemployment boost a disincentive to work? Research suggests more complex answer

A new post for The Conversation features analysis from a University of Maryland economist, who examined the notion that the $600 supplemental unemployment benefit disincentivizes employment by exceeding usual wages for some workers. The analysis revealed that on average, unemployed workers were bringing in 127% of their usual wages with this supplement. However, the author points to loss of non-cash benefits (like health insurance) as also important for understanding incentives, and cites research from Yale, which found no evidence of a disincentivizing effect (in part, because unemployment is only available to those who have not received a viable employment offer). Finally, while wage replacement is an important goal of unemployment insurance, the other key goal is to stimulate the economy through consumer spending during economic downturns, which the author argues, is especially important now. Overall, the author argues that a federal supplement to unemployment insurance is a useful policy to support households and the economy during the pandemic. #covid-19 #workforce