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Are Extra Unemployment Benefits Keeping People From Working?

Are Extra Unemployment Benefits Keeping People From Working? So far, the evidence is not clear. A working paper put out by the Federal Reserve Bank of San Francisco suggested that the supplementary payments had a “small but noticeable” impact on Americans’ willingness to work, but could not be primarily responsible for the slow recovery in April. One of the more significant – and expensive – measures in the Biden administration’s American Rescue Plan, passed by Congress in early March, was a $300-per-week federal unemployment benefit. These benefits are scheduled to expire on August 31, but 24 Republican-controlled states have cancelled them early, on the basis that federal unemployment benefits were discouraging prospective employees from returning to work. While many of these states have retained statewide unemployment benefits, some have also instituted restrictions on them, requiring recipients to show evidence that they are actively looking for work to be paid.

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