Research / BFI Working PaperAug 24, 2020

US Unemployment Insurance Replacement Rates During the Pandemic

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.

More Research From These Scholars

BFI Working Paper Feb 11, 2021

Spending and Job Search Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data

Peter Ganong, Fiona Greig, Max Liebeskind, Pascal Noel, Daniel M. Sullivan, Joseph S. Vavra
Topics:  Employment & Wages, COVID-19
BFI Working Paper May 22, 2019

Why Has Regional Income Convergence in the U.S. Declined?

Peter Ganong, Daniel Shoag
Topics:  Uncategorized
BFI Working Paper Jan 16, 2018

How Do Changes In Housing Voucher Design Affect Rent and Neighborhood Quality?

Peter Ganong, Robert Collinson
Topics:  Economic Mobility & Poverty, Employment & Wages, Financial Markets