- Analysis by payroll platform Gusto finds that among states that ended federal supplemental unemployment benefits early, headcounts increased much faster in states with higher vaccination rates
- States that ended benefits early also saw increased hiring of workers over the age of 25, while those keeping the benefits relied more on teenage workers
- Economists have suggests that health care concerns and other issues have played a larger role than generous unemployment benefits in keeping people from returning to work
Summary by Dirk Langeveld
Workers have been more reticent to seek a job in states where vaccination rates against COVID-19 remain low, according to a recent analysis by the payroll platform Gusto. The report also determined that workforces were more likely to shift to employees over the age of 25 in states that ended federal supplemental unemployment benefits early.
Several governors criticized the supplements as offering a disincentive for people to return to work after a disappointing April jobs report and decided to withdraw from the federal benefits early. The analysis looked at the effect of early withdrawal from supplemental unemployment by comparing hiring trends in the service sector small businesses in states where the benefits ended June 12-19 and those in states that will maintain the benefits until they expire on Sept. 4.
- The analysis found that vaccination rates played a key role in encouraging people to return to work; in six states that ended benefits early and had an average of 34 percent of their adult population fully vaccinated when the announcement was made, worker headcounts have increased 11 percent since April
- By contrast, six other states that withdrew early and had an average of 27 percent of their adult population fully vaccinated when the announcement was made, worker headcounts were up just 3 percent
- Hiring is on par between states that ended unemployment benefits early and those that didn’t, with headcounts up 11.6 percent among those that withdrew early and 11.2 percent among those retaining the benefits until Sept. 4
- States that ended benefits early saw an increase in hires of workers over the age of 25, while businesses in states that retained the benefits tapped more into the teenage labor market
- While surveys have identified more generous unemployment benefits as having some impact on keeping people from returning to work, economists see factors such as child care responsibilities, health care concerns, and career reassessment as having a larger effect
