Work or Welfare? An Empirical Analysis of Unemployment Insurance and Employment Decisions by Gender in the COVID-19 Pandemic

The COVID-19 pandemic hits female workers the most. To protect those people who are vulnerable to the COVID-19 pandemic, the government has launched an additional weekly supplement since March 2020. The CARES Act proposed a 600 dollars weekly unemployment compensation from March 2020 to July 2020 and another 300 dollars weekly unemployment compensation starting from January 2021 and suggested to end by September 2021. Twenty-nine States followed the suggested end time of this additional 300 dollars weekly compensation, while the remaining twenty-two states decided to end this unemployment insurance benefit earlier. Holzer, Hubbard, and Strain found that with the early state-level expiration in June 2021 of the pandemic unemployment befits, the unemployment rate would be lowered by 3.5% if all states withdrew the unemployment benefit in June 2021 (Holzer et al., 2021). Similarly, I will also study the expiration of the second round of unemployment benefits in the United States but focus on the gendered effect of the UI benefits expiration. I have used the difference-in-difference method to do an event study of the UI benefits 300 dollars per week benefits expiration. I found that male workers were around 0.5% more likely to find a job after the UI benefits expired than female workers1. Moreover, the UI benefits expiration increases the employment rate by 1.2%.