Reinstating and extending pandemic-related UI programs will boost incomes and save jobs: Gains to personal income, GDP, and employment in 2021 from maintaining the PUA, PEUC, and PUC programs through that year
| Income boost (billions) | GDP boost (percent) | Employment boost (millions) | |
|---|---|---|---|
| Pandemic Unemployment Assistance | $92.85 | 0.7% | 1.1 |
| Pandemic Emergency Unemployment Compensation | $57.44 | 0.5% | 0.7 |
| $600 Pandemic Unemployment Compensation Payment | $290.27 | 2.3% | 3.3 |
| Total gains | $440.56 | 3.5% | 5.1 |
Notes: We take the relationship between the unemployment rate (or long-term unemployment rate) and the boost to personal income from Pandemic Unemployment Assistance (or Pandemic Emergency Unemployment Compensation) for July, August, and September 2020 and assume it continues going forward as benefits are extended through 2021.
We take the relationship between the unemployment rate (or long-term unemployment rate) and the boost to personal income from Pandemic Unemployment Assistance (or Pandemic Emergency Unemployment Compensation) for July, August, and September 2020 and assume it continues going forward as benefits are extended through 2021. Similarly, we take the relationship between unemployment and personal income from Pandemic Unemployment Compensation between April and August and assume that relationship would continue in 2021 if that program were reinstated. We apply a multiplier of 1.5 to the personal income boost provided by each UI program. We then divide this boost by overall GDP, and apply the resulting percentage change to the prediction level of employment in each quarter of 2021 to get an implied employment boost. The numbers in the chart are the average boost to personal income, GDP, and employment over all quarters of 2021. Some quarters would see even larger effects.
Source: Authors’ analysis based on 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), data on unemployment and long-term unemployment from the Bureau of Labor Statistics Current Population Survey (CPS), and data on total nonfarm employment from the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES).
This chart appears in:
Previous chart: « If the suite of unemployment insurance programs were reinstated and extended, how many more jobs will we have in 2021?: Job gains by state, 2021
Next chart: U.S. Postal Service ‘market-dominant’ and ‘competitive’ volume and revenue, 2007 and 2019 »