If the weekly unemployment insurance increase is cut by $400, how many jobs will it cost over the next year?: Jobs cost as a level and as a share of employment
|State||Jobs cost||Jobs cost, as a share of employment|
Notes: We take the relationship between the unemployment rate and the boost to personal income from the extra $600 payment that held in May of 2020 and assume it falls to $200 beginning August. We apply a multiplier of 1.5 to the personal income decline provided by cutting back on the enhanced UI benefit. We then divide this boost by overall GDP, and apply the resulting percentage change to the average level of employment in the first quarter of 2020 to get an implied employment reduction. The numbers in the chart are the average reductions to personal income, GDP, and employment between the third quarter of 2020 and the second quarter of 2021. Some quarters would see even larger effects.
Source: Author’s analysis based on data from the National Income and Product Accounts (NIPA) data from the Bureau of Economic Analysis (BEA), projections from the Congressional Budget Office (CBO), data on continuing unemployment insurance claims from the Department of Labor (DOL), and total nonfarm employment from the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES).