People who lose their jobs usually start spending a lot less, and Americans in general cut their spending during the pandemic. But when their benefits were boosted, unemployed workers actually started spending more. Estimating these workers’ “marginal propensity to consume,” the authors conclude that the beneficiaries spent about 30 to 40 cents of each extra dollar within a month, and about two-thirds of the extra cash within six months.

This was important to the economy, as it came at a time when businesses really needed the extra dollars. Unemployment benefits accounted for about 7 percent of all personal income in June of last year. The authors estimate that the $600 boost pumped up overall spending by 2 percent or more between April and July.

The result is also relevant to stimulus policy going forward. Giving cash to the unemployed appears to have higher bang for the buck than other ways of pushing dollars into the economy, including those free-money-for-all stimulus checks everyone is obsessed with. Giving money to people who actually lost jobs is also more defensible as a form of “relief.”