Extending $ 600 In Unemployment Benefits Could Save Lives, Fed Study Says


(Bloomberg) – As Congress debates extending generous unemployment benefits, a new report says keeping some workers away from their jobs would save thousands of lives.

CARES Act unemployment benefits will increase unemployment in the United States by an average of 3.7 percentage points from April to December 2020, but it will also reduce cumulative deaths by 4.7% and save 27,000 lives, according to a working paper published by the Federal Reserve Bank of Atlanta. on its website Friday.

The additional $ 600 per week unemployment benefit will expire on Friday and Congress has yet to agree on a new stimulus package. Critics of supplemental insurance argue that it reduces the incentive to work for those who earn more money being unemployed than returning to work.

“More generous unemployment insurance policies create disincentives to work and lead to higher unemployment,” the researchers said in the paper, while noting that jobs require close contact with other employees and the public increase infection rates and potential deaths.

The working paper, written by economists at the Federal Reserve Bank of Atlanta and the Federal Reserve Bank of Kansas City, found that reducing the additional benefit to $ 200 per week would further increase the unemployment rate by 3 percentage points between August and December.

The shutdown measures amplify the effects of unemployment insurance by increasing the base of the unemployed, according to the newspaper.

“Between the young and the old, the elderly in general prefer more mitigation policies, especially a shutdown policy, because of their higher likelihood of dying from the virus,” the researchers found.

© 2020 Bloomberg L.P.


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