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New paper on pandemic UI!
TLDR expanded benefits had large spending & small job-finding impacts
Implications
1) Unemployed hhs have high MPCs *even* though also have high liquidity. Inconsistent with rep agent model
2) Temporary benefits promising tool for future recessions
TLDR expanded benefits had large spending & small job-finding impacts
Implications
1) Unemployed hhs have high MPCs *even* though also have high liquidity. Inconsistent with rep agent model
2) Temporary benefits promising tool for future recessions
New paper with @Dan_M_Sullivan @pascaljnoel @JoeVavra using #JPMCInstitute data
Reduced-form findings similar to prior drafts so I’ll focus here on what’s new which is that we organize the results into three lessons
Reduced-form findings similar to prior drafts so I’ll focus here on what’s new which is that we organize the results into three lessons
Lesson 1: Benefit supplements are important for explaining the dynamics of spending, but *not* the dynamics of employment.
New findings on spending during unemployment and macro conditions by my colleagues at #JPMCInstitute
TLDR: UI policy and liquidity are the key drivers of spending for unemployed households.
Macro conditions, in contrast, appear not to matter.
Thread
TLDR: UI policy and liquidity are the key drivers of spending for unemployed households.
Macro conditions, in contrast, appear not to matter.
Thread
^ Spending very similar for
* Green line: Great Recession
* Blue line (almost identical): 2010's boom
These are two periods where macro conditions are very different, but income in the first few months of unemployment are very similar
* Green line: Great Recession
* Blue line (almost identical): 2010's boom
These are two periods where macro conditions are very different, but income in the first few months of unemployment are very similar
^ The orange line for 2020 when PUC available, is radically different -- much more income paid out and much higher spending too
Today, the #JPMCInstitute released a new insight documenting the impact of supplemental UI benefits on job finding, spending, and saving of jobless workers btwn April-July 2020. We find little evidence that it discouraged people from returning to work. 1/6 jpmorganchase.com/institute/rese…
Job finding for UI benefit recipients showed no sustained increase after the $600-per-week federal supplemental UI benefit expired. Furthermore, we observe that more than half of jobless workers who received the $600 supplement returned to work before the supplement expired. 2/6
Among jobless workers receiving benefits in Oct, roughly half are facing long-term unemployment, and many are facing repeat unemployment. Labor market prospects for this segment have been especially impacted by the economic effects of the pandemic, warranting continued relief 3/6
#JPMCInstitute is #hiring a research analyst and associate to join the team in Washington, D.C. who will conduct economic research for the public good using propriety de-identified big data within JPMorgan Chase.
The ideal candidate will have experience in statistics, data science, or computer programming and a strong background in economics or another quantitative social science. We are committed to working in intellectually flat, inclusive and diverse teams. Come join us!
Links below. Share or apply today!
This is a useful thread which happens very kind toward my own research. Thanks @Simon_Mongey and @adam_tooze. Let me take the opportunity to articulate one thought and I apologize in advance because I will oversimplify it.
Empirically, a number of studies found large expenditure responses to anticipated transfers at the bottom of the distribution. Theoretically, financial frictions (binding constraints or wedges btw borrowing and lending) do exactly that. We've also known this for a decade at least
Quantitatively, though, it's another story. In the data (e.g. the SCF for the US), only about 10% of households, at most, are poor hand-to-mouth, i.e. have zero *net worth*, and the median household has around $100K.
