IDEAS home Printed from https://ideas.repec.org/p/fip/fedawp/101969.html

COBOLing Together UI Benefits: How Delays in Fiscal Stabilizers Affect Aggregate Consumption

Author

Abstract

The United States experienced an unprecedented increase in unemployment insurance (UI) claims beginning in March 2020. State UI-benefit systems were strained beyond their administrative capacity to process the dual challenge of an unprecedented increase in claims and changes to UI benefits. In states that used an antiquated programming language, COBOL, to process claims, potential claimants experienced a larger increase in administrative difficulties, resulting in longer delays in benefit disbursement. States that used an antiquated UI-benefit system experienced a 2.8 percentage point decline in total credit and debit card consumption relative to card consumption in states with more modern UI benefit systems. Furthermore, states that used these antiquated systems experienced at least a 2.1 percentage point increase in the share of claims that were delayed by more than 70 days.

Suggested Citation

  • Michael Navarrete, 2025. "COBOLing Together UI Benefits: How Delays in Fiscal Stabilizers Affect Aggregate Consumption," FRB Atlanta Working Paper 2025-14, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:101969
    DOI: 10.29338/wp2025-14
    as

    Download full text from publisher

    File URL: https://www.atlantafed.org/-/media/Project/Atlanta/FRBA/Documents/research/publication/working-paper/2025/10/16/14-coboling-together-ui-benefits-how-delays-in-fiscal-stabilizers-affect-aggregate-consumption.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.29338/wp2025-14?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jonathan A. Parker & Nicholas S. Souleles & David S. Johnson & Robert McClelland, 2013. "Consumer Spending and the Economic Stimulus Payments of 2008," American Economic Review, American Economic Association, vol. 103(6), pages 2530-2553, October.
    2. Aaron Amburgey & Serdar Birinci, 2020. "Which Earnings Groups Have Been Most Affected by the COVID-19 Crisis?," Economic Synopses, Federal Reserve Bank of St. Louis, issue 37, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. David Brown & John S. Earle, 2012. "Do SBA Loans Create Jobs? Estimates from Universal Panel Data and Longitudinal Matching Methods," Working Papers 12-27, Center for Economic Studies, U.S. Census Bureau.
    2. Greg Kaplan & Giovanni L. Violante & Justin Weidner, 2014. "The Wealthy Hand-to-Mouth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(1 (Spring), pages 77-153.
    3. Jarociński, Marek & Maćkowiak, Bartosz, 2018. "Monetary-fiscal interactions and the euro area's malaise," Journal of International Economics, Elsevier, vol. 112(C), pages 251-266.
    4. Anna Sokolova, 2023. "Marginal Propensity to Consume and Unemployment: a Meta-analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 813-846, December.
    5. Marco Di Maggio & Amir Kermani & Kaveh Majlesi, 2020. "Stock Market Returns and Consumption," Journal of Finance, American Finance Association, vol. 75(6), pages 3175-3219, December.
    6. Adrien Auclert, 2019. "Monetary Policy and the Redistribution Channel," American Economic Review, American Economic Association, vol. 109(6), pages 2333-2367, June.
    7. Pennings,Steven Michael, 2020. "Cross-Region Transfers in a Monetary Union : Evidence from the US and Some Implications," Policy Research Working Paper Series 9244, The World Bank.
    8. Corsetti, Giancarlo & Simonelli, Saverio & Acconcia, Antonio, 2015. "The Consumption Response to Liquidity-Enhancing Transfers: Evidence from Italian Earthquakes," CEPR Discussion Papers 10698, C.E.P.R. Discussion Papers.
    9. Alisdair McKay, "undated". "Idiosyncratic risk, insurance, and aggregate consumption dynamics: a likelihood perspective," Boston University - Department of Economics - Working Papers Series 2013-013, Boston University - Department of Economics.
    10. Javier Andrés & José E. Boscá & Javier Ferri & Cristina Fuentes‐Albero, 2022. "Households' Balance Sheets and the Effect of Fiscal Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(4), pages 737-778, June.
    11. Eva De Francisco, 2019. "Housing Choices and Their Implications for Consumption Heterogeneity," International Finance Discussion Papers 1249, Board of Governors of the Federal Reserve System (U.S.).
    12. Oh, Hyunseung & Reis, Ricardo, 2012. "Targeted transfers and the fiscal response to the great recession," Journal of Monetary Economics, Elsevier, vol. 59(S), pages 50-64.
    13. Mark Aguiar & Corina Boar & Mark Bils, 2019. "Who Are the Hand-to-Mouth?," 2019 Meeting Papers 525, Society for Economic Dynamics.
    14. Claudia R. Sahm & Matthew D. Shapiro & Joel Slemrod, 2012. "Check in the Mail or More in the Paycheck: Does the Effectiveness of Fiscal Stimulus Depend on How It Is Delivered?," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 216-250, August.
    15. Miura, Ken & Sakurai, Takeshi, 2021. "News from the Sky: An Empirical Test of Forward-Looking Behavior Among Zambian Farmers," 2021 Conference, August 17-31, 2021, Virtual 315161, International Association of Agricultural Economists.
    16. Scott Fulford & Joanna Stavins, 2022. "Does getting a mortgage affect consumer credit use?," Review of Economics of the Household, Springer, vol. 20(3), pages 955-991, September.
    17. Katya Kartashova & Xiaoqing Zhou, 2025. "How Do Mortgage Rate Resets Affect Consumer Spending and Debt Repayment? Evidence from Canadian Consumers," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 57(5), pages 1167-1210, August.
    18. Arna Vardardottir & Michaela Pagel, 2016. "The Liquid Hand-to-Mouth: Evidence from a Personal Finance Management Software," 2016 Meeting Papers 789, Society for Economic Dynamics.
    19. Brant Abbott & Giovanni Gallipoli, 2022. "Permanent‐income inequality," Quantitative Economics, Econometric Society, vol. 13(3), pages 1023-1060, July.
    20. SeHyoun Ahn & Greg Kaplan & Benjamin Moll & Thomas Winberry & Christian Wolf, 2018. "When Inequality Matters for Macro and Macro Matters for Inequality," NBER Macroeconomics Annual, University of Chicago Press, vol. 32(1), pages 1-75.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedawp:101969. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rob Sarwark (email available below). General contact details of provider: https://edirc.repec.org/data/frbatus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.