During the Great Recession from December 2007 to June 2009, many Unemployment Insurance (UI) claimants remained unemployed after exhausting their unemployment benefits. “To extend support to these unemployed workers, policymakers implemented two…initiatives…: (1) adoption of the Emergency Unemployment Compensation Act of 2008 (EUC08) program, which was extended and expanded by the American Recovery and Reinvestment Act of 2009 and other legislation and (2) full federal funding of the permanent Extended Benefits (EB) program in states with atypically high unemployment rates. Up to 99 weeks of benefits were available through the UI, EB, and EUC08 programs…in states with the weakest labor markets…these benefits enabled unemployed workers to search for work for a longer period before collecting all (‘exhausting’) their [Unemployment Compensation] UC entitlements” (p.xvii).
The U.S. Department of Labor, Employment and Training Administration commissioned a study to examine “the extent to which such benefit exhaustions occurred and assess…the outcomes experienced by those who exhausted their entitlements to all available UC benefits relative to other groups of unemployed workers” (p.xvii).
“This study focused on three general questions related to the exhaustion of all available UC benefits:
- How many UC recipients exhausted their UC entitlements and what were the major factors associated with exhaustion of benefits?
- How did exhaustees fare in terms of their labor market outcomes, household economic circumstances, and participation in reemployment programs and programs of income support?
- How did the outcomes for UC exhaustees compare to the outcomes of individuals with long unemployment spells who did not collect UC benefits?” (p.xvii).
The authors used statistical analysis using “(1) administrative data about UC claims, employment, and earnings and (2) survey data from 10 states on recipients who filed UI initial claims between January 2008 and September 2009. The administrative data covered January 2008 through September 2012, and the survey was conducted from December 2013 to August 2014, four to six years following the UI initial claims. The data file provided a comprehensive picture of UC recipients’ benefit” (p.xvii).
(Abstractor: Author and Website Staff)
Full publication title: Exhaustees of Extended Unemployment Benefits Programs: Coping with the Aftermath of the Great Recession
Major Findings & Recommendations
The authors describe the UI exhaustion rate and the factors associated with exhaustion of benefits: • “[Claimants] were eligible for 88 weeks of UC benefits, on average, and 57 percent were eligible for the maximum number of 99 weeks. • They collected, on average, a total of 43 weeks of UC benefits through both the regular UI claim and EUC08 and EB claims linked to it…” (p.25). • “Almost two-thirds of [claimants] (63 percent) exhausted their benefits through the regular UI program, and somewhat fewer recipients (56 percent) received an EUC08 first payment. • About 44 percent collected EUC08 tier 2 benefits; 37 and 29 percent collected EUC08 tiers 3 and 4, respectively; and 29 percent collected EB. • About one-quarter of them (26 percent) exhausted all of the UC benefits…available to them. • Exhaustees collected an average of nearly 60 more weeks of benefits than did nonexhaustees” (p.25). They also describe exhaustees’ post-claim outcomes: “In comparison to single-claim recipients who did not exhaust all of the UC benefits to which they were entitled, [the authors] found that single-claim UC exhaustees: • Had similar levels of job search intensity in the first three months after their job separations. • Had lower levels of employment and earnings during the three years following their UI claims. • Were less likely to be employed and more likely to be out of the labor force at the time of the survey (four to six years after the UI claim)… • Were more likely to have income at or below the poverty level and to participate in income-support programs” (p.43). The study also describes differences in outcomes between UC recipients and nonrecipients: • “Nonrecipients tended to come from groups for which rates of UI eligibility might be lower…. • Nonrecipients also had much more varied reemployment experiences than did recipients…. • Nonrecipients were more likely than both exhaustees and nonexhaustees to avoid large reductions in earnings and to experience large earnings gains. • Nonrecipients and exhaustees had higher rates of poverty and of [Supplemental Nutrition Assistance Program] collection than did recipients who did not exhaust their UI entitlements. • …[N]onrecipients…had lower rates of reemployment and higher rates of poverty” (p.59). (Abstractor: Author and Website Staff)