Hutchins Roundup: Unemployment insurance, weather events, and more

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Differences in state laws regarding unemployment insurance (UI) create a gap between what white and black claimants receive, find Daphn√© Skandalis of the University of Copenhagen and co-authors. Using observational data from a survey of UI claims, the authors break down the differences in UI outcomes between black and white claimants into three components: one explained by differences in work history, one explained by differences in UI laws m ‘all regions, and one unknown. and employment history and government regulations. They get that and the ratio of benefits to initial wages is 18% lower for Black claimants than for white claimants, and 8 percent of this difference is explained by the difference in laws in all countries.. They also show that states with the largest shares of black workers have seen the largest increases in welfare from generous UI laws, in part because the reduction in income is greater in states with large black populations. The design of UI rules, the authors conclude, contributes significantly to the creation of racial inequality.

While most people have a basic understanding of climate change, there is a lack of consensus within and across countries, find OECD’s Antoine Dechezlepr√™tre and co-authors. The authors asked more than 40,000 respondents in 20 countries about their knowledge of climate change and support for policy outcomes. They get that Support for climate change policies is closely related to respondents’ perceptions of the plan’s progress, progress, and financial impact on their families.. In addition, they find greater support for climate action in middle-income countries (such as China, India, and Brazil) and among respondents who lean left, college students, and those who use public transportation. However, this only accounts for a small portion of the differences in respondents’ opinions. To assess the role of knowledge in helping climate change, the authors randomly assigned educational videos to a small group of respondents. They find that outlining possible policy solutions is a more effective aid than providing information about the effects of climate change.

Following a decade of growth, productivity growth increased in the first year of the pandemic, but declined again in 2021 and 2022. Northwestern’s Robert Gordon and Princeton’s Hassan Sayed have proposed a new framework for understanding changes in productivity growth across business years. They argue that companies are more affected by recessions and fire more workers, which increases productivity when fewer workers can do more; as the economy improves and businesses hire more workers, productivity declines, which they argue shows a decline in productivity from 2010-2019.. The authors show that their forecasts accurately predict the duration of the epidemic, the increase in 2020 showing more layoffs and the slower growth that shows job hiring. Looking at what is driving productivity during the pandemic, they find that productivity rose sharply in domestic work but fell in other jobs.

Chart courtesy of The Wall Street Journal

“We know that supply shortages and constraints, including a weak labor market, have helped to account for the high inflation we’re seeing. We also know that the inflation that existed during the pandemic was caused by excessive austerity, excessive fiscal stimulus, and policies of the economy that has also contributed to the inflation we are experiencing … policy because in writing the FOMC’s [Federal Open Market Committee] mandate, Congress didn’t say ‘Your goal is price stability unless inflation is caused by supply shocks, when you’re leaving.’ We want to reduce inflation, regardless of the source, in part because whether it is from supply or demand, inflation can raise expectations of long-term inflation and thus influence monetary and price decisions in the near term. These decisions could raise prices significantly and make inflation more difficult to control,” says Christopher Waller, member, Federal Reserve Board of Governors.

“Based on what we know about inflation today, I expect that further increases in demand will be needed to keep monetary policy tight, but that will depend on economic data in the coming weeks and months… such as actual and expected increases in the FOMC’s cooling of assets and workers, which will help improve demand and supply. The decline in inflation will also be supported by the continued improvement of domestic pressures, which is happening in other sectors, and the increase in the labor force, which is still much lower than it was before the pandemic. I believe that This recovery will happen, but my expectations for the plan are not dependent. I expect the increase to continue after July at a pace that depends on what is coming.”

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