Unintended Consequences of Unemployment Insurance Benefits: The Role of Banks

• 成果类型: Article
• 署名作者: Arslan, Yavuz; Degerli, Ahmet; Kabas, Gazi
• 署名单位: University of Liverpool; Federal Reserve System - USA; Federal Reserve System Board of Governors; Tilburg University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.03217
• 发表日期: 2025
• 关键词: bank funding; Bank lending; precautionary saving; unemployment insurance; deposits

摘要

We use disaggregated U.S. data and a border discontinuity design to show that more generous unemployment insurance (UI) policies lower bank deposits. We test several channels that could explain this decline and find evidence consistent with households lowering their deposit holdings due to reduced precautionary savings. Because deposits are the largest and most stable source of funding for banks, the decrease in deposits affects bank lending. Banks that raise deposits in states with generous UI policies reduce their loan supply to small businesses. Furthermore, counties that are served by these banks experience a higher unemployment rate and lower wage growth.