Labor market trends and unemployment insurance generosity during the pandemic

Abstract

We test whether changes in unemployment insurance (UI) benefit generosity under the CARES Act in the US are associated with differential employment outcomes under the distinct conditions of the pandemic. While we observe a negative association between UI generosity and employment, we show that the relative employment gap arises before the Act was instituted, decreases in magnitude when the augmented benefits were in place, and does not change when the benefits expansion expires.