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How Did Pandemic UI Benefits Affect Employment Recovery in Local Industry Markets?


  • Andreas Hornstein
  • Marios Karabarbounis
  • Andre Kurmann
  • Etienne Lale


We analyze the employment recovery of low-wage establishments relative to the employment recovery of high-wage establishments within local labor markets, and we find a slower recovery in low-wage establishments. We associate the difference with the expanded generosity of pandemic unemployment insurance (UI) supplements, which have a larger negative effect on the job-filling rate of low-paying establishments. We use a model of labor search to translate our establishment-level observations into a disincentive effect of pandemic UI benefits at the worker level.

Suggested Citation

  • Andreas Hornstein & Marios Karabarbounis & Andre Kurmann & Etienne Lale, 2022. "How Did Pandemic UI Benefits Affect Employment Recovery in Local Industry Markets?," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 22(44), November.
  • Handle: RePEc:fip:fedreb:94976

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