We examine the impact of local labor market shocks and state unemployment insurance (UI) policies
on student discipline in U.S. public schools. Analyzing school-level discipline data and firm-level layoffs
in 23 states, we find that layoffs have little effect on discipline rates on average. However, effects differ
across the UI benefit distribution. At the lowest benefit level ($265/week), a mass layoff increases outof-
school suspensions by 5.1%, with effects dissipating as UI benefits increase. Effects are consistently
largest for Black students —especially in predominantly White schools —resulting in increased racial
disproportionality in school discipline following layoffs in low-UI states.
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