Covering More Workers with Unemployment Insurance: Lessons from the Great Recession Issue Brief

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Release Date: August 01, 2022

Covering More Workers with Unemployment Insurance: Lessons from the Great Recession Issue Brief

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Employment and Training ,  Unemployment Insurance

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About the Brief

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In 2018, the Chief Evaluation Office (CEO) partnered with the Employment and Training Administration (ETA) to fund contractor The Urban Institute to design and conduct an evaluation that examines critical policy issues, lessons learned, and challenges states faced administering Unemployment Insurance (UI) programs during the Great Recession that began in 2007 and the economic recovery that followed.

The brief is a result of an extensive literature review that explores lessons on benefits extensions and UI recipiency that can inform current and future UI policy and practice. The brief discusses some of the potential issues posed for UI by nonstandard employment, changes in UI recipiency over time,and efforts to broaden coverage in the Great Recession.

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Key Takeaways

  • Although some efforts to expand coverage in the last recession were successful where adopted, researchers found the longer-term trends in UI recipiency have been downward due to countervailing policy and economic factors.
  • The incentives for expanding coverage included in the ARRA UI modernization provisions successfully spurred states’ adoption of these expansions, and these provisions were largely maintained by state UI programs in the recovery following the Great Recession.
    • The majority of state UI programs now cover part-time workers and have an alternative base period.
    • Allowing separations for compelling family reasons, which was relatively uncommon before the Great Recession, is now included in about half of UI programs.
    • The empirical literature generally finds these provisions modestly increase UI coverage and payments.
  • STC programs were expanded during and following the Great Recession across and within states, as a result of both federal and state policy efforts.
    • At the start of the COVID-19 pandemic and related economic downturn, 27 states and the District of Columbia had STC programs.
    • Overall, however, STC remains relatively uncommon in the United States, especially when compared with other countries such as Germany. Research identifies that important barriers to STC use appear related to employer knowledge of the program and frictions associated with employer participation. Estimates suggest that, where employed and adopted, STC may prevent layoffs.

Citation

Congdon, W.J., Vroman, W. (2021). Urban Institute. Covering More Workers with Unemployment Insurance. Chief Evaluation Office, U.S. Department of Labor.

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The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.