The safety net and job loss: How much insurance do public programs provide?

Chloe N. East and David Simon

Journal of Public Economics, 2024, vol. 238, issue C

Abstract: We comprehensively evaluate the role of the U.S. safety net in replacing displaced workers’ lost income and health insurance using the 1996–2013 Survey of Income and Program Participation. Cash and near-cash programs replace 32% of lost income on average over the two years following job loss and reduce the likelihood of experiencing poverty by 18 percentage points. 97% of transfer benefits paid in these two years come from Unemployment Insurance. Two years after job loss, the replacement rate is 28%, but this is largely driven by UI benefit extensions unique to the Great Recession. Public health insurance makes up for 17% of the loss in private insurance, but, even two years later, rates of uninsurance are higher than pre-job loss. Looking at heterogeneous effects, in general, the safety net is progressive, though we uncover important gaps in benefits for some disadvantaged groups.

Keywords: Job loss; Safety net; Unemployment insurance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:238:y:2024:i:c:s0047272724001075

DOI: 10.1016/j.jpubeco.2024.105171

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