Expanding Access to Unemployment Insurance

As part of its pandemic policy response, the U.S. government implemented the largest increase in unemployment insurance (UI) benefits in history. How did this unprecedented increase in unemployment benefits affect labor markets and household spending? This paper uses administrative bank account data covering millions of households, several causal research designs, and a dynamic structural model to estimate and interpret the responses to these supplements. We find that, gauged in several different ways, these increases in benefits had large effects on spending but small effects on job-finding, implying that the increased benefits provided households with financial relief without being a significant drag on the economic recovery.