Panel Paper: The Minnesota Unemployment Insurance Program Response to the 2007-2009 Economic Recession

Thursday, November 7, 2013 : 3:40 PM
Salon III A (Ritz Carlton)

*Names in bold indicate Presenter

Russell Saltz, IMPAQ International and Jim Hegman, Minnesota Department of Employment and Economic Development
During the 2007 to 2009 economic recession the unemployment insurance system experienced unprecedented demand. Going into the recession, Minnesota was experiencing an unemployment rate of 4.8 percent. This rate peaked at 8.3 percent in April of 2009 and remained at this level through June 2009.  Similarly, the number of initial claims in the state of Minnesota was 21,727 going into the recession in December 2007 and doubled to peak at 43,750 in May 2009. In order to meet these demands, temporary modifications were made to the UI system, most noticeably the extension of benefits. This paper asks the question:  How did state UI programs adapt to the changing economic conditions and meet the demands ex-ante and ex-post of the 2007 to 2009 economic recession? We explore this research question by conducting a state case study analysis of Minnesota’s UI program before, during and after the economic recession. The first part of this paper investigates this question by looking at the programs and processes in place for the state of Minnesota before, during and after the recession. Minnesota’s UI programs and procedures are examined as they normally operate as well as changes made to these programs as a result of the recession. The second part of this paper presents an empirical analysis of state level UI data for Minnesota which investigates changes in the demand and usage of the state’s UI system before, during and after the recession.