US Unemployment Insurance Replacement Rates During the Pandemic

16 Pages Posted: 15 May 2020 Last revised: 18 May 2020

See all articles by Peter Ganong

Peter Ganong

University of Chicago

Pascal Noel

University of Chicago Booth School of Business

Joseph Vavra

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 15, 2020

Abstract

We use micro data on earnings together with the details of each state’s UI system under the CARES Act to compute the entire distribution of current UI benefits. The median replacement rate is 134%. Two-thirds of UI eligible workers can receive benefits which exceed lost earnings and one-fifth can receive benefits at least double lost earnings. There is sizable variation in the effects of the CARES Act across occupations and states, with important distributional consequences. We show how alternative UI expansion policies would change the distribution of UI benefits and thus affect resulting liquidity provision, progressivity, and labor supply incentives.

Suggested Citation

Ganong, Peter and Noel, Pascal and Vavra, Joseph, US Unemployment Insurance Replacement Rates During the Pandemic (May 15, 2020). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-62, Available at SSRN: https://ssrn.com/abstract=3601492 or http://dx.doi.org/10.2139/ssrn.3601492

Peter Ganong

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Pascal Noel

University of Chicago Booth School of Business ( email )

No Address Available
United States

Joseph Vavra (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
90
Abstract Views
330
rank
253,814
PlumX Metrics