Extending $600 Jobless Benefits Could Save Lives, Fed Study Says
As Congress debates extending generous unemployment benefits, a new report says that keeping certain workers away from their jobs would save thousands of lives.
The CARES Act unemployment benefits will increase U.S. unemployment by an average of 3.7 percentage points from April to December 2020, but it would also reduce cumulative death by 4.7% and save 27,000 lives, according to aworking paper posted by theFederal Reserve Bank of Atlanta on its website Friday.
The extra $600 per week unemployment benefit is set to expire on Friday and Congress has yet to agree on a new stimulus package. Critics of the added insurance argue that it reduces the incentive for employment for those who get more money from being unemployed than they would by going back to work.
“More generous UI policies create work disincentives and lead to higher unemployment,” the researchers said in the paper, while also noting that jobs requiring close contact with other employees and the public increases infection rates and potential deaths.
The working paper, which was authored by economists from the Federal Reserve Bank of Atlanta and theFederal Reserve Bank of Kansas City, found that reducing the extra benefit to $200 a week would still increase the unemployment rate by 3 percentage points between August and December.
Shutdown measures amplify the effects of unemployment insurance by increasing the base of the unemployed, according to the paper.
“Between young and old people, the old in general prefer more mitigation policies, especially shutdown policy, because of their higher probability to die from the virus,” the researchers found.
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