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How Insured Are Workers Against Unemployment? Unemployment Insurance and the Distribution of Liquid Wealth

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Abstract

In this Economic Commentary, we analyze the relationship between unemployment insurance (UI) recipiency and insurance by examining the wealth distribution of workers who have been through an unemployment spell. We focus on the net liquid wealth gap between recipients and nonrecipients of UI along the income distribution of the unemployed. Using recent data from the Survey of Income and Program Participation at the individual level, we estimate that UI recipients at the bottom half of the income distribution tend to have higher median net liquid wealth than nonrecipients, putting nonrecipients in a potentially vulnerable economic position during periods of unemployment.

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  • Andre Luduvice & Anaya Truss-Williams, 2024. "How Insured Are Workers Against Unemployment? Unemployment Insurance and the Distribution of Liquid Wealth," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2024(16), pages 1-8, October.
    • Handle: RePEc:fip:fedcec:98962
    DOI: 10.26509/frbc-ec-202416
    Note: Replication codes for this paper are available at https://github.com/avdluduvice/LuduviceTruss-Williams_UI.; See appendix.
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    References listed on IDEAS

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    1. Serdar Birinci & Kurt See, 2023. "Labor Market Responses to Unemployment Insurance: The Role of Heterogeneity," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(3), pages 388-430, July.
    2. Auray, Stéphane & Fuller, David L. & Lkhagvasuren, Damba, 2019. "Unemployment insurance take-up rates in an equilibrium search model," European Economic Review, Elsevier, vol. 112(C), pages 1-31.
    3. Serdar Birinci, 2020. "Unemployment Insurance and Vulnerable Households During the COVID-19 Pandemic," Economic Synopses, Federal Reserve Bank of St. Louis, issue 33, May.
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