Title: Unemployment Insurance Extended Benefits will lapse too soon without policy changes
Headings: Unemployment Insurance Extended Benefits will lapse too soon without policy changes
Unemployment Insurance Extended Benefits will lapse too soon without policy changes
Lauren Bauer
Fellow - Economic Studies, The Hamilton Project
Wendy Edelberg
Director - The Hamilton Project
Senior Fellow - Economic Studies
Jana Parsons
Former Research Analyst - The Hamilton Project
What Are Unemployment Insurance Extended Benefits?
How Do Unemployment Insurance Extended Benefits Turn On…and Off?
How Have Insured Unemployment Rates Triggered Extended Benefits in Recent Years?
How do Insured Unemployment Rate Triggers and the Total Unemployment Rate Trigger Compare?
What is the Relationship Between EB Triggers and Long-Term Unemployment?
What should Policymakers Do?

Content: There is also room for states to take full advantage of provisions under current law by opting into more generous benefit extensions. In tandem, these federal and state actions would make it more likely that the U.S. unemployment insurance system doesn’t hinder the COVID-19 economic recovery. What Are Unemployment Insurance Extended Benefits? Unemployment insurance payments, including the $600 extra payments and expanded eligibility provided by the CARES Act, totaled $361 billion from March through July 2020, providing households with a substantial boost to income and increasing demand for goods and services. Under current state laws, unemployment insurance benefits are typically time-limited to between 12 and 28 weeks, with the majority of states offering 26 weeks of benefits. Access to regular UI benefits may be dramatically curtailed as early as spring 2021, long before the labor market is expected to have recovered. For prolonged economic downturns, the UI system includes a program called UI Extended Benefits, or EB, which automatically extends benefits for 6–20 additional weeks using automatic triggers based on particular economic indicators (e.g. state-wide unemployment rates or the share of people collecting UI benefits). Due to the swift and severe nature of the economic shock from the COVID-19 pandemic, these triggers have automatically turned on EB in nearly every state. This prompt EB triggering is unusual; in the past the lack of responsiveness of the automatic triggers spurred Congress to enact emergency UI extensions.