Academic journal article Research in Applied Economics

Who Receives Unemployment Insurance?

Academic journal article Research in Applied Economics

Who Receives Unemployment Insurance?

Article excerpt

Abstract

This paper uses Unemployment Insurance (UI) administrative data combined with Current Population Survey data in 2003 to examine socioeconomic patterns in UI receipt for new job losers. We find that key socioeconomic groups - women, nonwhites, youth, and workers with no high school diploma - were much less likely than average to start collecting UI benefits once they lost their jobs. These differences are partly attributable to differences in part-time employment and unionization; workers in groups with low part-time employment and high unionization rates had higher than average UI receipt rates. We also find that certain groups of job losers - women, youth, workers with no college education, and blue collar workers - collected much lower benefits once they entered the program. These differences are mainly attributed to variation in benefit entitlements and other factors. Our findings enhance our understanding of the effectiveness of the UI program to serve the diverse population of new job losers in the modern US economy.

Keywords: Unemployment Insurance; unemployment; gender; race; industry; education; occupation.

(ProQuest: ... denotes formulae omitted.)

1. Introduction

The proportion of unemployed workers in the US that receive Unemployment Insurance (UI) benefits has been low historically, raising questions about the effectiveness of the program to serve the unemployed population. Numerous studies have tackled the issue of low UI receipt, focusing on the factors explaining the historical and recent trends in UI participation among unemployed workers. Such studies have attributed low UI receipt to a number of factors, including strict eligibility requirements in some states, low UI application rates, and changes in the industrial and occupational structure of the economy.

Perhaps surprisingly, there is limited research examining recent UI receipt patterns in the US and how these differ across key socioeconomic groups. Existing research has relied mostly on secondary data sources to examine UI receipt rates by gender and race or by industry and occupation in a single state or at the national level. To our knowledge, there is no research that examines UI receipt rates for a wide range of socioeconomic characteristics (gender, race, education, age, industry, and occupation) and no research that examines socioeconomic differences in UI receipt rates and benefits amounts collected. Understanding UI receipt patterns of key socioeconomic groups, as well as the key underlying factors that may explain those patterns, during periods of moderate unemployment is crucial in assessing and identifying ways to improve the effectiveness of the UI program to serve the diverse unemployed population.

This paper helps to fill this research gap by examining differences in UI receipt for new job losers by gender, race, education, age, industry, and occupation. For our analyses, we combine UI administrative data from Minnesota, Oregon, Pennsylvania, and Wisconsin with Current Population Survey (CPS) data in 2003, a year in which the US unemployment rate (6.0 percent) was about equal to the average US unemployment rate in the last 20 years. Using these data, we construct three state-level measures of UI receipt for new job losers, overall and by socioeconomic characteristic: 1) UI receipt rate, which estimates the proportion of new job losers who start a new UI claim; 2) benefits per recipient, which is the population mean of benefit amounts collected per new UI recipient; and 3) benefits per new job loser, which estimates the average benefit amounts collected per new job loser. Using these measures, we examine UI receipt patterns across the four states and across socioeconomic groups within each state. In particular, we examine which groups of new job losers are likely to start a new UI claim once they lose their jobs and which groups are likely to collect high UI benefit amounts once they enter the UI program. …

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