Spending and Job-Finding Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data / Peter Ganong, Fiona E. Greig, Pascal J. Noel, Daniel M. Sullivan, Joseph S. Vavra.

Format:

Book

Author/Creator:

Ganong, Peter.

Contributor:

National Bureau of Economic Research.

Greig, Fiona E.

Noel, Pascal J.

Sullivan, Daniel M.

Vavra, Joseph S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30315.

NBER working paper series no. w30315

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We show that the largest increase in unemployment benefits in U.S. history had large spending impacts and small job-finding impacts. This finding has three implications. First, increased benefits were important for explaining aggregate spending dynamics--but not employment dynamics-- during the pandemic. Second, benefit expansions allow us to study the MPC of normally low-liquidity households in a high-liquidity state. These households still have high MPCs. This suggests a role for permanent behavioral characteristics, rather than just current liquidity, in driving spending behavior. Third, the mechanisms driving our results imply that temporary benefit supplements are a promising countercyclical tool.

Notes:

Print version record

August 2022.