US Unemployment Insurance Replacement Rates During the Pandemic / Peter Ganong, Pascal J. Noel, Joseph S. Vavra.

Format:

Book

Author/Creator:

Ganong, Peter.

Contributor:

National Bureau of Economic Research.

Noel, Pascal J.

Vavra, Joseph S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27216.

NBER working paper series no. w27216

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We use micro data on earnings together with the details of each state's unemployment insurance (UI) system to compute the distribution of UI benefits after the uniform $600 Federal Pandemic Unemployment Compensation (FPUC) supplement implemented by the CARES Act. We find that between April and July 2020, 76% of workers eligible for regular Unemployment Compensation have statutory replacement rates above 100%, meaning that they are eligible for benefits which exceed lost wages. The median statutory replacement rate is 145%. We also compute comprehensive replacement rates, which account for employer provided non-wage compensation and differential tax treatment of labor income and UI. 69% of UI-eligible unemployed have comprehensive replacement rates above 100% and the median comprehensive replacement rate is 134%. The presence of the FPUC has important implications for the incidence of the recession and reverses income patterns which would have otherwise arisen across income levels, occupations, and industries.

Notes:

Print version record

May 2020.