 Why Are Unemployment Insurance Claims So Low?Christopher J. O’Leary, Kenneth J. Kline, Thomas A. Stengle and Stephen A. Wandner Economic Development Quarterly, 2024, vol. 38, issue 3, 164-182 Abstract: The authors investigate reasons unemployment insurance (UI) claims have declined dramatically over the past 3 decades. The fall is concerning because it suggests a reduced countercyclical effectiveness of the UI program. Additionally, weekly initial UI claims are an important leading indicator of aggregate economic activity, so their meaning has changed. The authors identify the main factors that changed with the decline in claims. Their procedure suggests what the level of claims would have been later in the period, had values of variables or parameters of the system been at levels observed earlier in the period. The analysis of state-year data suggests that the decline in UI claims stems largely from changes in the industrial and occupational mix of employment interacting with changes in UI program features set by individual states. This decline could be offset by federal rules for states to improve benefit access, replacement rates, and potential UI durations. Keywords: unemployment insurance (UI); applications for benefits; wage replacement rate; potential duration of benefits; industrial mix of employment; occupational mix of employment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:38:y:2024:i:3:p:164-182 DOI: 10.1177/08912424241256643 Access Statistics for this article More articles in Economic Development Quarterly |
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