Roadmap

This report examines the antipoverty effects of UI benefits over the past three recessions. It highlights the impact of the additional and expanded benefits available to unemployed workers in response to the most recent recession. Estimates presented in this report are based on Congressional Research Service (CRS) analysis of 25 years of data from the U.S. Census Bureau's Annual Social and Economic Supplement to the Current Population Survey (CPS/ASEC), administered from 1988 to 2012. Interaction of the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. This report contributes to this recent research on the antipoverty effects of unemployment insurance in several ways. Its period of analysis is longer and allows comparisons across the three most recent recessions. The report includes estimates of the effects on the poverty rate for the unemployed, those receiving UI, and for families that report at least one family member receiving UI. It also estimates how much of the total reported UI benefits went directly to decreasing family poverty levels. Because the U.S. poverty measure is based on the income of all co-resident related family members, UI receipt affects not only the poverty status of the person receiving the benefit, but the poverty status of all related family members, as well. In 2011, while an estimated 10.2 million people reported UI receipt during the year, an additional 15.8 million family members lived with the 10.2 million receiving the benefit. In terms of the most recent recession and its aftermath, UI benefits (UC, EB, and EUC08) continue to appear to have a large poverty-reducing effect among unemployed workers who receive them. In particular, given the extended length of unemployment among jobless workers, the additional weeks of UI benefits beyond the regular UC program's approximately 26-week limit appear to have had an especially important effect in poverty reduction. Review of Analysis

The report shows that UI benefits appear to significantly reduce the incidence of poverty among the population who receives them. The UI benefits' poverty reduction effects appear to be especially important during and immediately after recessions. The analysis finds that there was a markedly higher impact on poverty in 2009 and 2010 than in the previous two recessionary periods. The estimated antipoverty effects of UI benefits in 2009 and 2010 were about twice that of two previous peak years of unemployment, in 1993 and 2003. In 2011, well over one-quarter (26.5%) of unemployed people who received UI benefits would have been considered poor prior to counting the UI benefits they received; after counting UI benefits, their poverty rate was cut by almost half, to 13.8%. Consequently, UI receipt in 2011 affected the income status of some 26.0 million persons. In 2011, the poverty rate was 40% less than it would have been without these unemployment benefits. In 2011, UI benefits lifted an estimated 2.3 million people out of poverty, of which well over one-quarter (26.8%; 620,000) were children living with a family member who received UI benefits. 110-252 ) into law. Title IV of this act created a new temporary unemployment insurance program, the Emergency Unemployment Compensation (EUC08) program. 111-5 , P.L.
This report examines the antipoverty effects of unemployment insurance benefits during the past recession and the economic recovery. The analysis highlights the impact of the additional and expanded unemployment insurance (UI) benefits available to unemployed workers through the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) and the Emergency Unemployment Compensation (EUC08) program (Title IV of P.L. 110-252). In 2011, approximately 56% of all unemployed individuals were receiving UI benefits (down from a high of 66% in 2010) and thus were directly affected by legislative changes to the UI system. UI benefits appear to have a large poverty-reducing effect among unemployed workers who receive them. Given the extended length of unemployment among jobless workers, the additional weeks of UI benefits beyond the regular program's 26-week limit appear to have had an especially important effect in poverty reduction.
Estimates presented in this report are based on Congressional Research Service (CRS) analysis of 25 years of data from the U.S. Census Bureau's Annual Social and Economic Supplement to the Current Population Survey (CPS/ASEC), administered from 1988 to 2012. The period examined includes the three most recent economic recessions.
This report contributes to recent research on the antipoverty effects of unemployment insurance in several ways. Its period of analysis allows comparisons across the three most recent recessions. The report includes estimates of the effects on the poverty rate for the unemployed, for those receiving UI, and for families that report at least one family member receiving UI. It also estimates how much of reported UI benefits went directly to decreasing family poverty levels.
This report's analysis shows that UI benefits appear to reduce the prevalence of poverty significantly among the population that receives them. The UI benefits' poverty reduction effects appear to be especially important during and immediately after recessions. The analysis also finds that there was a markedly higher impact on poverty in the most recent recession than in the previous two recessionary periods. The estimated antipoverty effects of UI benefits in 2011 were about 50% higher than that of two previous peak years of unemployment—1993 and 2003.
In 2011, over one quarter (26.5%) of unemployed people who received UI benefits would have been considered poor prior to taking UI benefits into account; after counting UI benefits, their poverty rate decreased by just under half, to 13.8%. UI receipt affects not only the poverty status of the person receiving the benefit, but the poverty status of all related family members, as well. In 2011, while an estimated 10.2 million people reported UI receipt during the year, an additional 15.8 million family members lived with the 10.2 million receiving the benefit. Consequently, UI receipt in 2011 affected the income status of some 26.0 million persons. In 2011, the poverty rate for persons in families who had received unemployment benefits was almost 40% less than it otherwise would have been.
In 2011, UI benefits lifted an estimated 2.3 million people out of poverty, of which well over one quarter (26.8%; 620,000) were children living with a family member who received UI benefits.