US

Income Support in the COVID-19 Crisis

Question A:

The balance of federal and local government support to address the economic impact of the crisis has thus far been tilted too much towards supporting firms rather than individuals.

Responses weighted by each expert's confidence

Question B:

Government provision of financial support to firms to keep workers on payroll for the duration of the lockdown will make the recovery faster than if the only recourse for workers to replace income were unemployment insurance.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
3
Bio/Vote History
Protecting the supply chain against collapse is important as well
Alesina
Alberto Alesina
Harvard
Uncertain
3
Bio/Vote History
Altonji
Joseph Altonji
Yale
Uncertain
5
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
Autor
David Autor
MIT
Disagree
6
Bio/Vote History
The U.S. overshot on increasing UI generosity rather than paying firms to retain workers. Other countries have done far better.
Baicker
Katherine Baicker
University of Chicago
Uncertain
3
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Uncertain
5
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Uncertain
7
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Uncertain
5
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
5
Bio/Vote History
But my real criticism is that too little of the spending has been aimed at the virus itself - testing capacity, etc.
Cutler
David Cutler
Harvard
Uncertain
3
Bio/Vote History
Deaton
Angus Deaton
Princeton
Uncertain
5
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Uncertain
1
Bio/Vote History
Hard to say. Subsidizing firms to reduce worker separations may help workers quite a lot. This calls for an analysis that I have not done.
Edlin
Aaron Edlin
Berkeley
Strongly Agree
8
Bio/Vote History
Supporting firms invites graft and lining the pockets of buddies
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Both firms & individuals need (more) support. In terms of who should get more, much depends on what you think firms will do with their money
Einav
Liran Einav
Stanford
Uncertain
1
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Uncertain
8
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
5
Bio/Vote History
See Question B): Keeping people on payroll is a more effective way to support individuals
Goolsbee
Austan Goolsbee
Chicago
Strongly Agree
10
Bio/Vote History
When people die, they can’t reorganize and come back.
Greenstone
Michael Greenstone
University of Chicago
Agree
2
Bio/Vote History
Hall
Robert Hall
Stanford
Disagree
5
Bio/Vote History
In principle, it doesn't matter which side is subsidized. But he actual law is better at preserving employment on the employer side.
Hart
Oliver Hart
Harvard
Strongly Agree
8
Bio/Vote History
It makes sense to support individuals who have lost their incomes. Firms can close for a period or renegotiate their contracts.
Holmström
Bengt Holmström
MIT
Uncertain
3
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Strongly Agree
10
Bio/Vote History
The logic of social insurance indicates that working through firms is inefficient and poor targeting.
Hoynes
Hilary Hoynes
Berkeley
Agree
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
8
Bio/Vote History
Certainly way too much help for large firms. Some big firms will benefit from the forgivable "loans".
Kaplan
Steven Kaplan
Chicago Booth
Disagree
8
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
7
Bio/Vote History
do you think the firms ultimately will wind up insolvent rather than just illiquid? not clear now, lots of second guessing is inevitable
Klenow
Pete Klenow
Stanford
Disagree
4
Bio/Vote History
Loans to firms could be forgivable if they furlough and recall their workers ex post.
-see background information here
Levin
Jonathan Levin
Stanford
Uncertain
3
Bio/Vote History
Both needed. Critical to support workers, and to ensure jobs are there as activity restarts.
Maskin
Eric Maskin
Harvard
Uncertain
4
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Agree
6
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
4
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Uncertain
6
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Uncertain
1
Bio/Vote History
It appears as if we need more support to both firms and individuals.
Scheinkman
José Scheinkman
Columbia University
Uncertain
6
Bio/Vote History
Probably balance tilted too much to large firms and financial institutions as opposed to SMBs, health-care delivery and individuals.
Schmalensee
Richard Schmalensee
MIT
Agree
5
Bio/Vote History
Certainly tilted too much toward large firms that can survive bankruptcy, as the airlines have done, rather than small firms that can't.
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
10
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Disagree
5
Bio/Vote History
Stock
James Stock
Harvard
Disagree
5
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Uncertain
1
Bio/Vote History
Hard to judge.
Udry
Christopher Udry
Northwestern
Agree
3
Bio/Vote History
There are some egregious examples, but I'm not sure wrt the overall balance.

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
3
Bio/Vote History
Protecting firm-worker and firm-firm matches from being destroyed is valuable
Alesina
Alberto Alesina
Harvard
Agree
5
Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
4
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Uncertain
3
Bio/Vote History
Autor
David Autor
MIT
Strongly Agree
7
Bio/Vote History
Those worker-firm relationships were valuable. CARES subsidizes firms and workers to break those bonds, and this may slow recovery
Baicker
Katherine Baicker
University of Chicago
Agree
3
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Agree
5
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
5
Bio/Vote History
In theory, yes. But implementation of PPP programs so far seems to be a failure.
Brunnermeier
Markus Brunnermeier
Princeton
Strongly Agree
7
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
8
Bio/Vote History
Cutler
David Cutler
Harvard
Agree
5
Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
7
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
3
Bio/Vote History
UI alone delays rematching workers and firms, and reduces the quality of matches, especially with a staggered restart (places and sectors).
Edlin
Aaron Edlin
Berkeley
Agree
8
Bio/Vote History
care must be taken to be supporting workers.
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Keeping them on payroll will limit suffering & loss of insurance. It will avoid rupturing connections. But it will also slow reallocation.
Einav
Liran Einav
Stanford
Agree
1
Bio/Vote History
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Uncertain
8
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Strongly Agree
6
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
6
Bio/Vote History
Pay-to-stay only works if we can go back to what we were doing before not if some industries are changed permanently. The virus is the boss.
Greenstone
Michael Greenstone
University of Chicago
Agree
2
Bio/Vote History
Hall
Robert Hall
Stanford
Agree
1
Bio/Vote History
UI in practice does not have job-preserving features, whereas subsidies to employers are conditioned on retaining workers, which is good.
Hart
Oliver Hart
Harvard
Uncertain
5
Bio/Vote History
I don't see why furloughed workers cannot be called back. During the crisis they may also be usefully employed elsewhere.
Holmström
Bengt Holmström
MIT
Agree
4
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
10
Bio/Vote History
The furlough provisions of CARE act offer a combination of job protection and pay replacement.The choice posed in the question is false one
Hoynes
Hilary Hoynes
Berkeley
Strongly Agree
8
Bio/Vote History
Judd
Kenneth Judd
Stanford
Uncertain
7
Bio/Vote History
Firms can use that money to pay workers they were going to keep. UI has often been used for layoffs. Good UI system would be best option.
Kaplan
Steven Kaplan
Chicago Booth
Agree
8
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
7
Bio/Vote History
disclosure: i am on the academic panel advising the Fed on its main street lending facility; on the question, see caveat to question a
Klenow
Pete Klenow
Stanford
Agree
4
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
3
Bio/Vote History
Given high job loss, creating incentives to rehire will also be important as we restart activity.
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Uncertain
1
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Strongly Agree
7
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Agree
7
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
Preserving the matching of workers to firms, by retaining workers on firms' payrolls, would hasten recovery by eliminating one step.
Scheinkman
José Scheinkman
Columbia University
Agree
8
Bio/Vote History
Specially for small and medium enterprises.
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
5
Bio/Vote History
Keeping employment relationships intact will speed recovery, but there must be direct aid for the unemployed, particularly the undocumented.
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
8
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Agree
6
Bio/Vote History
But this might keep some firms going, even if they should go bankrupt
Stock
James Stock
Harvard
Agree
7
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Agree
6
Bio/Vote History
Udry
Christopher Udry
Northwestern
Agree
8
Bio/Vote History
Help in both directions is important to maintain the network of connections between firms and employees.