US | Enhanced benefits aren’t the labor market’s top problem
Enhanced US unemployment benefits are discouraging only a small share of unemployed workers from finding jobs. The disincentive to work is greatest among lower-wage workers in states where the combination of emergency and regular unemployment benefits are the highest relative to prevailing wages.
What you will learn:
- An increase in the number of people receiving benefits doesn’t dramatically weaken job-search activity, and states offering high replacement wages haven’t experienced significantly slower job growth.
- In the current environment, low-wage workers in states that aren’t ending the federal emergency benefits early might be tempted to temporarily remain unemployed since they can earn 10%-20% more from unemployment benefits.
- Health conditions are the most important factor for labor market healing. Cross-correlation analysis indicates states loosen restrictions three to four weeks after a consistent downturn in new cases, which then allows labor markets to heal more quickly.
Tags:
Related Services
Post
Latin America Key Themes 2024 – Slower growth, but it’s not all bad news
Growth in most LatAm economies will be below consensus. Economic momentum has surprised to the upside through most of 2023, but the full effects of record global and domestic monetary tightening are yet to be seen.
Find Out More
Post
Easing financial conditions offer CRE some respite
Our measure of financial conditions has become less restrictive in the US and started to loosen in the eurozone and the UK, reflecting investors' expectations that interest rates have peaked. This should aid the outlook for commercial real estate (CRE) on the margins, although the scale of past rate hikes, sluggish economies, and structural headwinds mean the sector still confronts challenging fundamentals.
Find Out More