Unemployment Insurance and Household Welfare: Microeconomic Evidence 1980-93

Daniel Hamermesh and Daniel T. Slesnick

No 5315, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This study examines the relative economic well-being of households that receive unemployment insurance (UI) benefits, as measured by consumption flows that are derived from information on households' spending in the Consumer Expenditure Surveys from 1980- 1993. For each quarter during this period we obtain the per-capita and equivalence-scale adjusted economic welfare of the two types of households. Adjusting for differences in the households' characteristics, we find: 1) The average UI recipient household during this period had a level of economic well-being that was on average between 3 and 8 percent below that of otherwise identical households (depending on the welfare measure used); 2) During a substantial part of this time the economic well-being of households that received UI benefits was at least that of other households; and 3) There is no cyclical variation in the relative well-being of UI recipient households compared to others. The findings imply that during the 1980s and early 1990s states' UI programs did a satisfactory job of maintaining the well-being of UI recipients. Emergency programs enacted during recessions raised potential duration sufficiently to prevent the economic position of the average UI recipient from deteriorating.

JEL-codes: D12 I38 (search for similar items in EconPapers)
Date: 1995-10
Note: LS
References: View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Forthcoming: Research in Employment Policy, 1997.

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