Ending unemployment benefits had little impact on jobs and fueled $2 billion spending cut, study finds

Posted on AllSides August 23rd, 2021
From The Center
Frederic J. Brown | AFP | Getty Images

States that withdrew early from federal unemployment programs pushed few people back to work and fueled a nearly $2 billion cut in household spending, potentially hurting their local economies, according to new research.

Twenty-six state governors — all Republican, except one — opted out of the pandemic-era programs several weeks before their official expiration on Labor Day. Enhanced benefits were keeping the unemployed from looking for jobs and fueling a labor shortage, they claimed.

That bet seems to have had a limited payoff so far, according to a paper authored by economists...

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