https://macropaperwarehouse.com/authors/marios-karabarbounis/Marios KarabarbounisHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/disincentive-effects-of-unemployment-insurance-benefits/https://macropaperwarehouse.com/papers/disincentive-effects-of-unemployment-insurance-benefits/<p>This paper isolates the disincentive effects of pandemic unemployment insurance (UI) benefits on employment recovery, separating them from the simultaneously operating stimulative (demand) effects that previous studies conflate. The authors study the largest UI expansion in U.S. history — the CARES Act of March 2020 — which introduced three simultaneous provisions: a $600 weekly income supplement (FPUC) through end of July 2020, a 13-week extension of maximum benefit duration (PEUC), and expanded eligibility to workers previously ineligible for UI (PUA), together raising the median replacement rate to 145% and more than doubling the number of UI recipients.</p>