How Unemployment Benefits Affect Job Search During Coronavirus

ZipRecruiter survey of 4,000 U.S. respondents suggests reducing emergency unemployment benefits would increase job offer acceptance slightly, cause large drop in personal spending 

A surprising feature of the coronavirus recession is that while unemployment has jumped, job search activity has declined. As of August 1, 2020, Google searches for “how to find a job” are still well below their mid-February peak, as are new job seeker account registrations, searches, and job applications on ZipRecruiter and other job search websites. 

The influence of the $600 boost to weekly unemployment benefits, passed in the CARES Act, is a hotly debated topic. 

We find that only a small number of respondents have turned down job offers because of the current level of federal benefits ($600). However, a larger proportion of respondents would search more aggressively for new opportunities if federal emergency benefits fell to $200.


The Survey

To measure job search intensity and the effect of unemployment benefit generosity, ZipRecruiter surveyed approximately 4,000 U.S. respondents, of whom roughly 2,700 reported having lost their jobs or incomes due to the pandemic, and roughly 1,000 reported being current unemployment insurance recipients. 

The survey tested the effects of unemployment benefit levels in two ways: (1) by asking respondents directly how a $400 reduction in weekly benefits would affect their job search behavior, and (2) by testing the influence of state benefit levels, state job posting trends, and individual characteristics on self-reported job search behaviors and outcomes.  

Key Findings

1. Job Search Intensity 

ZipRecruiter respondents who lost a job or income due to the pandemic and are currently receiving unemployment benefits report searching intensely and widely. 

  • The median time spent searching for work each day was 120 minutes and the median number of job applications submitted in the past 30 days was 20. 
  • The percentages of respondents who report applying for jobs outside their preferred occupation, outside their preferred location, or for which they are overqualified are 47%, 28% and 44%, respectively. 

2. Unemployment Benefit Generosity and Job Search Intensity 

Survey evidence on the relationship between benefit generosity and job search behavior is mixed. 

  • If benefits are reduced by $400 per week in the coming month:
    • 36% of the unemployment insurance recipients in our sample say they will have to spend more time searching for work.
    • 41% say they will have to accept a worse job than they would otherwise accept.
  • Had benefits been lower by $400 per week over the past month:
    • Only 2% of unemployment recipients in our sample say they would have accepted a full-time job offer they received that they ultimately declined.
    • Only 2.5% say they would have accepted a part-time, temporary, or freelance position that they declined.

Our regression analysis reveals no statistically significant relationship between state unemployment insurance benefit levels and measures of job search intensity. 

  • State benefit levels did not predict time spent on job search, the number of applications submitted in the past 30 days, the number of weeks before respondents initiated a search after losing a job, or whether respondents reported applying to jobs outside their preferred occupation, location, and qualification level. Our analyses controlled for race, gender, education level, and age cohort. 

3. Unemployment Benefit Generosity and Personal Spending 

Respondents who are currently receiving unemployment benefits report that a $400 decline in weekly benefits would force them to reduce their spending on a wide range of goods and services.  

  • 75% said they would have to cut back spending on groceries and other essentials.
  • 41% said they would be unable to pay their rent.
  • 38% said they would be unable to make a car payment.
  • 25% said they would be unable to afford their health insurance premium.
  • 21% said they would be unable to make a mortgage payment. 
  • 19% said they would have to move home. 

Conclusion 

Our findings suggest that, while unemployed Americans would likely increase their job search behavior if benefit levels fell, most would have limited opportunities to make different employment decisions given current labor market conditions. Meanwhile, the negative effects on markets for goods, services, housing and financial assets could compound the current difficulties in the labor market.


Methodology

ZipRecruiter surveyed 4,174 U.S. respondents who visited a ZipRecruiter job page using a mobile device between July 29 and August 4, 2020. Some respondents were logged in ZipRecruiter job seekers, and others came across a ZipRecruiter job page while browsing online information related to employment and occupations. 2,769 of the respondents reported having lost a job or income due to the coronavirus pandemic, and 1,012 reported being current unemployment insurance recipients.  

As is common with online and mobile surveys, the respondents skewed younger. 39% were Generation X, 37% Millennials, 17% Baby Boomers, and 6% Generation Z. 55% of the respondents identified as women and 44% as men. 53% of the respondents identified as white, 22% as black or African American, and 14% as Hispanic or Latino. 34% had a bachelor’s degree or higher, which is about the average across the U.S. workforce.

Written by

Julia Pollak is Chief Economist at ZipRecruiter. She leads ZipRecruiter's economic research team, which provides insights and analysis on current labor market trends and the future of work.

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