When the pandemic effectively stalled the global economy last year, Congress began frantically looking for ways to support workers unable to keep going to work due to the spread of the virus. The pandemic benefits were more generous and also applied to more people, leading some to argue that the benefits were encouraging citizens not to work.

It was that fear that drove many U.S. governors to cut off the federally funded benefits earlier this summer, believing that reducing benefits would send people back to work.

This is far from the first time that politicians and economists have disagreed over whether or not financial assistance has a positive effect on recipients. Now, analysts can compare employment and spending in states that cut benefits with those that did not in order to determine the effects of these sorts of programs.

This June, the University of Toronto began studying the effects that cutting pandemic UI benefits had on workers and their spending.

According to the study, ending the pandemic UI benefits increases cut the number of state benefit recipients by 35 percentage points. Following the cut, the likelihood that potential employees would find a job increased by 4.4 percentage points. Earnings increased slightly, but only enough to cover 5% of the lost income. Meanwhile, spending fell drastically, plummeting by an average of $145 per week.

The study blames "the mechanical exhaustion of the UI benefits" for the increase in employment rates, rather than any increased incentives to apply for a job.

The CARES Act, passed in March of last year, added a $600 per week supplement to UI benefits. These benefits expired in July and were not replaced until January when they were re-established at a rate of $300 per week. Since April, 26 states have cut off that $300 per week, as well. The University of Toronto study analyzed the effects of the June withdrawals.

The first benefit cuts came as soon as lawmakers saw the end of the pandemic on the horizon, assuming it would soon be much easier for citizens to get jobs and go to work.

Of course, now that the delta variant is bringing back waves of infections, any progress made may be lost. Parents may still end up watching kids stuck home from school, and the risk of infection is still a significant deterrent for many potential workers.

According to the Labor Department, as of August, roughly 1.5 million Americans were unable to look for work because of the pandemic, and COVID-19 related job loss increased by 400,000.