Effects of Unemployment Insurance for Self-Employed and Marginally-Attached Workers

We study the extension of Unemployment Insurance (UI) benefits to groups of workers typically excluded from the UI system—new entrants, the self-employed, and gig workers—implemented as part of the United States policy response to the 2020 COVID-19 crisis. Although enacted at the federal level, the state-level implementation resulted in large differences in the roll-out of benefits across jurisdictions in practice. We exploit this cross-state variation to estimate the causal impacts of these UI expansions on the labor market earnings, education choices, and mortality of affected groups using a spatial regression discontinuity design. We find that every additional dollar in UI payments received by self-employed workers led to a 30 cent reduction in their earn-ings, and find bigger reductions among platform-based gig workers of 48 cents. More generally, we find larger earnings reductions among self-employed workers in industries less affected by the pandemic. We find that the reduction in work reduced mortality among older gig workers by 0.36 percentage points that can be plausibly linked to reduced exposure to COVID through work—but find no health benefits among the self-employed more broadly.