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US unemployment insurance replacement rates during the pandemic.

ABSTRACT: We use micro data on earnings together with the details of each state's unemployment insurance (UI) system to compute the distribution of UI benefits after the uniform $600 Federal Pandemic Unemployment Compensation (FPUC) supplement implemented by the CARES Act. We find that between April and July 2020, 76% of workers eligible for regular Unemployment Compensation have statutory replacement rates above 100%, meaning that they are eligible for benefits which exceed lost wages. The median statutory replacement rate is 145%. We also compute comprehensive replacement rates, which account for employer provided non-wage compensation and differential tax treatment of labor income and UI. 69% of UI-eligible unemployed have comprehensive replacement rates above 100% and the median comprehensive replacement rate is 134%. The presence of the FPUC has important implications for the incidence of the recession and reverses income patterns which would have otherwise arisen across income levels, occupations, and industries.

SUBMITTER: Ganong P

PROVIDER: S-EPMC7525248 | biostudies-literature | 2020 Nov

REPOSITORIES: biostudies-literature

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US unemployment insurance replacement rates during the pandemic.

Ganong Peter P Noel Pascal P Vavra Joseph J

Journal of public economics 20200930

We use micro data on earnings together with the details of each state's unemployment insurance (UI) system to compute the distribution of UI benefits after the uniform $600 Federal Pandemic Unemployment Compensation (FPUC) supplement implemented by the CARES Act. We find that between April and July 2020, 76% of workers eligible for regular Unemployment Compensation have <i>statutory</i> replacement rates above 100%, meaning that they are eligible for benefits which exceed lost wages. The median ...[more]

PMID: 33012869

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Project description:ImportanceThe COVID-19 pandemic has been associated with increased unemployment rates and long periods when individuals were without health insurance. Little is known about how Medicaid expansion facilitates Medicaid enrollment as a buffer to coverage loss owing to unemployment.ObjectiveTo compare changes in health insurance coverage status associated with pandemic-related unemployment among previously employed adults in states that have vs have not expanded Medicaid eligibility.Design setting and participantsThis cohort study included US adults aged 27 to 64 years who were employed at baseline in the 2020 to 2021 Current Population Survey's Annual Social and Economic Supplement, which included calendar years 2019 to 2020 (32 462 person-years). Data analyses were conducted between November 2021 and April 2022.ExposuresJob loss (ie, new unemployment) experienced during 2020.Main outcomes and measuresPrimary outcomes were coverage status (ie, uninsured status) and source of coverage (ie, employer sponsored, marketplace, and Medicaid). Using 2-way person-by-year fixed-effects regression models, changes in coverage status associated with unemployment in states that expanded Medicaid were compared with states that did not expand Medicaid. Additional analyses were performed based on prepandemic coverage status.ResultsThe cohort included 16 231 adults (mean age, 46.8 [95% CI, 46.6-47.0] years; 51.6% women). New unemployment was associated with an increase of 2.9 (95% CI, 1.1-4.6) percentage points (P = .002) in the proportion of uninsured adults in Medicaid expansion states and an increase of 10.7 (95% CI, 2.4-18.9) percentage points (P = .01) in nonexpansion states. Workers were 5.4 (95% CI, 1.9-8.9) percentage points (P = .003) more likely to enroll in Medicaid after a job loss if they lived in a Medicaid expansion state compared with workers experiencing job loss in nonexpansion states.Conclusions and relevanceIn this cohort study of US adults, unemployment-related Medicaid enrollment was more frequent in Medicaid expansion states during the COVID-19 pandemic. Medicaid expansion led to a smaller increase in uninsured adults because those who lost private insurance coverage (eg, employer sponsored) appeared more able to transition to Medicaid after job loss.

Project description:ImportanceMore than 50 million US residents have lost work during the coronavirus disease 2019 (COVID-19) pandemic, and food insecurity has increased.ObjectiveTo evaluate the association between receipt of unemployment insurance, including a $600/wk federal supplement between April and July, and food insecurity among people who lost their jobs during the COVID-19 pandemic.Design, setting, and participantsThis cohort study used difference-in-differences analysis of longitudinal data from a nationally representative sample of US adults residing in low- and middle-income households (ie, <$75 000 annual income) who lost work during the COVID-19 pandemic. Data were from 15 waves of the Understanding Coronavirus in America study (conducted April 1 to November 11, 2020).ExposureReceipt of unemployment insurance benefits.Main outcomes and measuresFood insecurity and eating less due to financial constraints, assessed every 2 weeks by self-report.ResultsOf 2319 adults living in households earning less than $75 000 annually and employed in February 2020, 1119 (48.3%) experienced unemployment during the COVID-19 pandemic and made up our main sample (588 [53.6%] White individuals; mean [SD] age 45 [15] years; 732 [65.4%] women). Of those who lost employment, 415 (37.1%) reported food insecurity and 437 (39.1%) reported eating less due to financial constraints in 1 or more waves of the study. Among people who lost work, receipt of unemployment insurance was associated with a 4.3 (95% CI, 1.8-6.9) percentage point decrease in food insecurity (a 35.0% relative reduction) and a 5.7 (95% CI, 3.0-8.4) percentage point decrease in eating less due to financial constraints (a 47.8% relative reduction). Decreases in food insecurity were larger with the $600/wk supplement and for individuals who were receiving larger amounts of unemployment insurance.Conclusions and relevanceIn this US national cohort study, receiving unemployment insurance was associated with large reductions in food insecurity among people who lost employment during the COVID-19 pandemic. The $600/wk federal supplement and larger amounts of unemployment insurance were associated with larger reductions in food insecurity.

Dataset Information

US unemployment insurance replacement rates during the pandemic.

Publications

US unemployment insurance replacement rates during the pandemic.

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