In contrast, “what seems to be happening right now is that job creation exceeds the research effort of workers,” said Professor Marinescu, an economist at the University of Pennsylvania. “Compared to the reaction of people last spring, not that long ago, but the situation has changed a bit.”
In other words, a similar decline in workers’ desire to look for work is greater when there are a lot of jobs to be done, which is increasingly the case as the economy reopens.
In other research on expanding unemployment benefits, Peter Ganong of the Harris School at the University of Chicago and five co-authors found a lesser decrease in the propensity to look for work than previous research might have predicted. . In other words, those weekly supplements of $ 600 didn’t decrease employment much.
But these are circumstances which may no longer apply.
“The government’s goal should be to get everyone back to work as quickly as possible while continuing to provide economic support to workers who have not yet returned to work,” Ganong said. “Those two things weren’t in tension in 2020, and they are in tension in 2021. All of those things that made 2020 special are in retreat, so we’re now faced with a more traditional set of tradeoffs.”
Arindrajit Dube, an economist at the University of Massachusetts at Amherst who also studied the impact of extended benefits last year, is skeptical of the appeal of jobless benefits as the main explanation. He notes that even with the reported shortages, companies seem to be hiring at a breakneck pace.
Companies added 916,000 employees to payroll in March alone, a number matched only by the initial rebound in pandemic shutdowns last summer and in the aftermath of World War II. Additionally, the expanded benefits are expected to expire in September.
“Maybe an unemployed person spends several extra days unemployed because of the $ 300,” Professor Dube said. “But if that’s a problem, he takes care of himself. This is nothing compared to the broader trajectory of reopening, which overwhelms everything on the UI front.