Why triggers fail (and what to do about it): An examination of the unemployment insurance extended benefits program

Jeffrey B. Wenger and Matthew J. Walters
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Jeffrey B. Wenger: University of Georgia, Postal: University of Georgia
Matthew J. Walters: New York University, Postal: New York University

Journal of Policy Analysis and Management, 2006, vol. 25, issue 3, 553-575

Abstract: During periods of high unemployment, many workers exhaust their unemployment insurance (UI) benefits before regaining employment. To help alleviate this problem, Congress created the extended benefits (EB) program, expanding the number of weeks of benefits available to UI recipients in high unemployment states. The EB program operates by “triggering on” additional weeks of benefits in states where unemployment and UI benefit receipt are above federally established thresholds. We analyze the performance of the EB program by creating a series of policy simulations using weekly UI claims and unemployment data from the program's inception in 1970 through the most recent economic expansion in 2005. Overall, we find that EB triggers, as currently constructed, fail as a policy tool for extending UI benefits. Minor adjustments to the triggers are unlikely to be effective. We develop an alternative set of “fix point” triggers that allow the EB program to trigger on and off in a more timely fashion. These triggers outperform all previously legislated triggers as well as other commonly proposed triggering mechanisms on criteria of timeliness, breadth, and duration. © 2006 by the Association for Public Policy Analysis and Management

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:25:y:2006:i:3:p:553-575

DOI: 10.1002/pam.20191

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