Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

AI Summary. States that ended expanded pandemic unemployment benefits early saw the flow of unemployed workers into employment rise by roughly 12-14 percentage points and unemployment rates fall, according to difference-in-difference estimates. The authors also find early termination reduced the share of households reporting no difficulty meeting expenses, leaving welfare implications ambiguous.

Michael Strain, Glenn Hubbard, and Harry Holzer American Enterprise Institute
Date Posted:

.@MichaelRStrain Glenn Hubbard and @HolzerHarry find that in states that terminated pandemic-era UI benefits early, the flow of unemployed workers into employment increased by around 12-14pp following early termination. @AEIecon

Did ending expanded unemployment benefits early raise employment?

Core argument: Difference-in-difference estimates using CPS data indicate that the flow of unemployed workers into employment rose by roughly 12–14 percentage points in states that terminated pandemic UI benefits (FPUC and PUA) early in 2021, relative to states that did not.

We provide estimates of the impacts of the early termination of pandemic-era UI benefits in several states in 2021 that had expanded their generosity (FPUC) and the groups of workers eligible for benefits (PUA), relative to those that did not terminate those benefits early. Using CPS data, we present difference-in-difference estimates that the flow of unemployed workers into employment increased by around 12-14pp following early termination. Among prime-age workers, the effect is about two-thirds the size of the unemployed-to-employed flow among control states during the February–June 2021 period. We show that state-level unemployment rates fell following early exit from FPUC and PUA. Finally, we present evidence that early termination reduced the share of households that had no difficulty meeting expenses. The welfare implications of the early termination of FPUC and PUA are therefore ambiguous.

Takeaways by Macro Roundup® AI

  1. Difference-in-difference estimates using CPS data indicate that the flow of unemployed workers into employment rose by roughly 12–14 percentage points in states that terminated pandemic UI benefits (FPUC and PUA) early in 2021, relative to states that did not.
  2. Among prime-age workers, the estimated effect is about two-thirds the size of the unemployed-to-employed flow in control states over February–June 2021, and state unemployment rates fell following early exit from FPUC and PUA.
  3. Evidence indicates that early termination of FPUC and PUA reduced the share of households reporting no difficulty meeting expenses, leaving the welfare implications of ending the benefits ambiguous.

Related Articles:

  • Unemployment Is Low, Welfare High. What Gives? — Welfare enrollment continued growing even as unemployment fell from a 14.7% peak to 3.7%, with food-stamp recipients up 1.4m and Medicaid recipients up 18.5m. One major reason is that eligibility rules excluded over $1tn in pandemic stimulus checks, expanded child tax credits, and enhanced unemployment benefits from counting as income.
  • Calomiris on Gramm Ekelund and Early on Income Distribution — Transfer benefits phase out so quickly that the effective marginal tax rate in the lowest three income quintiles approaches 100%, meaning an extra dollar earned can cost roughly a dollar of benefits. Hours worked in the lower quintiles have plummeted, though the authors stop short of asserting a causal link.
Showing 96 database articles primarily about Unemployment/Participation