(Radio Iowa) – Iowans who’ve filed for unemployment benefits are no longer receiving an extra 300 dollars per week in federal unemployment payments. Governor Reynolds ordered the change, which took effect Sunday. Iowa State University economist Peter Orazem says since Iowa is one of the first four states ending these payments early, it’s a bit of a national experiment on unemployment benefits. “It will be a relatively unusual opportunity for us to see the extent to which those unemployment benefits actually matter for whether or not people are interested in accepting employment,” Orazem says.

Governor Reynolds and other Republicans have argued the 300 dollar federal bonus — on top of the regular state unemployment benefits — has discouraged people from returning to work. Orazem says there’s been some research on what happened when the extra FEDERAL pandemic-related unemployment benefits dropped from 600 to 300 dollars a week last summer.

Peter Orazem

“The change in labor supply behavior at that time was relatively modest,” Orazem says, “but of course that was in the middle of the surge in pandemic cases around the United States, so there were multiple things going on.”

Orazem says the question in 2021 is why the labor market hasn’t expanded as Covid vaccines became available. “So this is going to provide us some indication as to what is the importance of the vaccine versus what is the importance of the unemployment benefit,” Orazem says. Iowa’s unemployment rate for April was three-point-eight percent. The other change that took effect Sunday deals with the taxes Iowa businesses pay into the state’s Unemployment Trust Fund. Businesses that had pandemic-related layoffs were not being assessed a higher tax rate. That tax break ended yesterday.