January 11, 2010

No Correlation Between State Unemployment at Time of ARRA and Stimulus Funds Received

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Research by Mercatus Center Senior Research Fellow Veronique de Rugy examines a state’s unemployment at the time ARRA was passed and the stimulus funds that each state has received – there is no correlation between the two variables.

This suggests that stimulus funds have not been allocated according to a state’s level of economic distress, with disbursement instead being determined by other factors. The green projection line roughly shows how funds should have been dispersed if the federal government were acting in accordance with its own claim that stimulus spending can create jobs.