Not only did ending enhanced unemployment benefits do little to boost hiring, the states that ended the programs early also damaged their own economies. According to a paper released in August from researchers at Columbia, Harvard, the University of Massachusetts-Amherst, and the University of Toronto, the decision to end benefits early actually resulted in a significant financial hit.
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The employment dynamic — a loss of benefits without resulting job income for most people — led households to cut their weekly spending by 20%, according to the paper. As a result, economies of the cutoff states saw a reduction of nearly $2 billion in consumer spending from June through the first week of August.
"They turned down federal transfers and that money didn't come back into the state [from new job income]," University of Toronto assistant professor Michael Stepner said.
