Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Extended Unemployment Compensation and Economic Well-Being: Findings from the Great Recession

Friday, November 13, 2015 : 9:10 AM
President's Room (Hyatt Regency Miami)

*Names in bold indicate Presenter

Heinrich Hock, Karen Needels, Walter Nicholson and Joanne Lee, Mathematica Policy Research
Policy Context. The recession that began in late 2007 posed major challenges for the U.S. system of unemployment compensation (UC). Sharp increases in long-term unemployment prompted Congress to extend the potential duration of UC benefits to unprecedented levels. Traditionally, UC recipients are eligible for up to 26 weeks through regular-benefits (RB) programs during nonrecessionary periods. During the Great Recession, recipients who exhausted their RB entitlements were eligible for up to 73 additional weeks of benefits. This included benefits from both (1) the Extended Benefits (EB) program, which was established in the 1970s and activates automatically in states with high unemployment rates; and (2) a temporary program referred to as “EUC08,” due to its originating legislation—the Emergency Unemployment Compensation Act of 2008.

Research Objectives. This paper will present findings from an analysis of how the availability of additional weeks of benefits, particularly through the EB and EUC08 programs, was related to the outcomes of UC recipients who lost jobs during the Great Recession. It is part of a broader, ongoing evaluation we are conducting for the U.S. Department of Labor (DOL) to understand the adoption and effectiveness of UC policies enacted in response to the recession. The specific research questions we focus on in this paper are:

  • What Types of UC Recipients collected EB and EUC08 benefits? This analysis compares the pre-UC characteristics of EUC08/EB recipients to those who only collected through the RB programs to understand who made the greatest use of additional benefit availability during the recession.
  • How was the availability of additional benefits related to reemployment and earnings? This analysis adds to a body of existing work studying the relationship between the availability of additional recessionary benefits and recipients’ labor market activity.
  • How did UC recipients support themselves over their long unemployment spells? This analysis focuses on the relationship between UC benefit availability and household income, poverty, financial hardships, and participation in other income support programs. Our findings here will build on a more-limited set of past research on UC durations and household financial health.

Study Design. Our analysis is based on two primary data sources that we collected for the study: (1) administrative data on UC benefits and UC-covered earnings from 17 states, which contained more than half of the RB claims paid during the recession; (2) a survey providing detailed information about the characteristics and experiences of 2,150 UC recipients in 12 of these states. These data allow for an extensive analysis of recipients who lost their jobs in the depth of the recession (2008 and 2009), and also allow for comparison between select measures developed separately from administrative and survey sources. We are currently analyzing the data and will have results available by late summer. DOL has granted preliminary approval to present findings at the APPAM conference.