US unemployment insurance replacement rates during the pandemic

Peter Ganong, Pascal Noel and Joseph Vavra

Journal of Public Economics, 2020, vol. 191, issue C

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.

Keywords: Unemployment insurance; Replacement rates; CARES Act; Pandemic (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (96)

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Working Paper: US Unemployment Insurance Replacement Rates During the Pandemic (2020)
Working Paper: US Unemployment Insurance Replacement Rates During the Pandemic (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:191:y:2020:i:c:s0047272720301377

DOI: 10.1016/j.jpubeco.2020.104273

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