Kritische Blicke auf die Coronakrise und ihre Folgen
Kritische Blicke auf die Coronakrise und ihre Folgen

Unemployment Insurance Replacement Rates

Peter Ganong, Pascal Noel, Joseph Vavra: US Unemployment Insurance Replacement Rates During the Pandemic, in: BFI-WP, Nr. 2020-62, May 2020.

The authors used microdata on income together with details of the U.S. unemployment insurance system of each state under the CARES Act to calculate the overall distribution of current insurance benefits. 

The average benefit payment is 134%. Two-thirds of those eligible for insurance can receive benefits that exceed loss of earnings, and one-fifth can receive benefits that at least double the loss of earnings. The effects of the CARES law vary greatly according to profession and state, which leads to considerable distributional consequences. We show how an alternative policy to expand retirement benefits would change the distribution of retirement benefits and thus affect the resulting provision of liquidity, progressiveness and incentives for labor supply.

Link to the PDF file of the article on the website of the Becker Friedman Institute