A Yale University study undercut the Republican Party’s claim that the $600-per-week unemployment boost made it difficult for businesses to bring back workers.
Senate Republicans and the White House have repeatedly noted the federal boost has resulted in benefits higher than previous salaries, which is true, but they’ve baselessly argued that this has made it difficult to bring back workers as they seek to drastically slash the benefit to around $200 per week.
"I mean, we're paying people not to work. It's better than their salaries would get," White House economic adviser Larry Kudlow claimed last month.
“In some cases people are overpaid, and we want to make sure there's the right incentives [to get back to work],” Treasury Secretary Steven Mnuchin said on Sunday. “In certain cases where we're paying people more to stay home than to work.”
Yale study disputes claim:
A study by Yale researchers found that the enhanced benefits "neither encouraged layoffs during the pandemic's onset nor deterred people from returning to work once businesses began reopening."
"Workers facing larger expansions in unemployment insurance benefits have returned to their previous jobs over time at similar rates as others," the researchers wrote. "We find no evidence that more generous benefits disincentivize work either at the onset of the expansion or as firms looked to return to business over time. In future research, it will be important to assess whether the same results hold when states move to reopen."
Chicago Fed agrees:
The Federal Reserve Bank of Chicago found a similar trend.
"Those currently collecting benefits search more than twice as intensely as those who have exhausted their benefits," their study said.
Ernie Tedeschi, a former Treasury economist, also disputed the claim.
“The bottom line was that I found no evidence of any effect on labor market flows from more generous UI in May and June, controlling for other demographic factors,” he said of his analysis.
