This report presents an analysis of the effect of the unemployment insurance program as an automatic stabilizer and of recent changes in that effect. The report discusses the theoretical reasons that would enable the UI program to stabilize, to some extent, the business cycle; then presents some previous empirical evidence of this effect. It reviews the empirical literature concerning the ability of UI to act as a stabilizer. The report describes the methodology that is used to estimate the effect of UI and discusses the results of the estimation.