In August 2020, the US government introduced the Lost Wages Assistance Program, the purpose was to provide relief to the unemployed workers. Under the program, $300 additional payments were provided in addition to regular UI benefits. Using the Household Pulse Survey, this paper attempts to study the employment effects of the program. I find that a 1% increase in the replacement rate due to LWA was associated with a 4% decrease in the probability of working. Using timing variation, I present the event study results through the Callaway and Sant'anna estimator and find similar negative employment effects. The results are robust to various specifications and statistically significant among the sub-groups as well.
JEL Codes: J21, J22, J65