US Unemployment Insurance Replacement Rates During the Pandemic

Peter Ganong, Pascal J. Noel and Joseph Vavra

No 27216, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E24 J65 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-ias and nep-mac
Note: EFG LS ME PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (110)

Published as Peter Ganong & Pascal Noel & Joseph Vavra, 2020. "US unemployment insurance replacement rates during the pandemic," Journal of Public Economics, vol 191.

Downloads: (external link)
http://www.nber.org/papers/w27216.pdf (application/pdf)

Related works:
Journal Article: US unemployment insurance replacement rates during the pandemic (2020)
Working Paper: US Unemployment Insurance Replacement Rates During the Pandemic (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:27216

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27216

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().