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Scraping By: Income and Program Participation After the Loss of Extended Unemployment Benefits

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  • Rothstein, Jesse
  • Valletta, Robert G.

Abstract

Despite unprecedented extensions of available unemployment insurance (UI) benefits during the “Great Recession†of 2007-09 and its aftermath, large numbers of recipients exhausted their maximum available UI benefits prior to finding new jobs. Using SIPP panel data and an eventstudy regression framework, we examine the household income patterns of individuals whose jobless spells outlast their UI benefits, comparing the periods following the 2001 and 2007-09 recessions. Job loss reduces household income roughly by half on average, and for UI recipients benefits replace just under half of this loss. Accordingly, when benefits end the household loses UI income equal to roughly one-quarter of total pre-separation household income (and about one-third of pre-exhaustion household income). Only a small portion of this loss is offset by increased income from food stamps and other safety net programs. The share of families with income below the poverty line nearly doubles. These patterns were generally similar following the 2001 and 2007-09 recessions and do not vary dramatically by household age or income prior to job loss.

Suggested Citation

  • Rothstein, Jesse & Valletta, Robert G., 2014. "Scraping By: Income and Program Participation After the Loss of Extended Unemployment Benefits," Institute for Research on Labor and Employment, Working Paper Series qt74x2f4jh, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt74x2f4jh
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    References listed on IDEAS

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    1. Congressional Budget Office, 2012. "Unemployment Insurance in the Wake of the Recent Recession," Reports 43734, Congressional Budget Office.
    2. Lukas Inderbitzin & Stefan Staubli & Josef Zweimüller, 2016. "Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution," American Economic Journal: Economic Policy, American Economic Association, pages 253-288.
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    Cited by:

    1. Robert Valletta, 2014. "Recent extensions of U.S. unemployment benefits: search responses in alternative labor market states," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    2. Ricardo Reis & Alisdair McKay, 2015. "Optimal Automatic Stabilizers," 2015 Meeting Papers 608, Society for Economic Dynamics.
    3. Jeffrey Clemens, 2016. "Redistribution through Minimum Wage Regulation: An Analysis of Program Linkages and Budgetary Spillovers," Tax Policy and the Economy, University of Chicago Press, pages 163-189.
    4. Andreas I. Mueller & Jesse Rothstein & Till M. von Wachter, 2016. "Unemployment Insurance and Disability Insurance in the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 445-475.
    5. repec:eee:moneco:v:88:y:2017:i:c:p:1-14 is not listed on IDEAS

    More about this item

    Keywords

    Social and Behavioral Sciences;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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