Expirations of Pandemic Jobless Programs Caused an Unprecedented Drop in Access to Unemployment Insurance
RSF grantee, RSF: Russell Sage Journal of the Social Sciences journal issue editor, and former RSF visiting scholar Till von Wachter (University of California, Los Angeles) has authored a report with Alex Bell (California Policy Lab) and Matthew Forbes (RAND Corporation) for the California Policy Lab on the impacts of the expiration of expanded unemployment insurance (UI) programs under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The expiration of expanded benefits is commonly referred to as a “benefits cliff.” When pandemic benefits, including expanded UI benefits, expired on September 4, 2021, von Wachter and his research team found that, nationally, there was an unprecedented 22-percentage point decrease in unemployed workers receiving UI. This was a much larger reduction in coverage than during the Great Recession benefits cliff, which only saw an eight-percentage point decrease in UI recipients. Despite this reduction in UI claimants, the pandemic UI benefits cliff did not see a meaningful increase in the number of people employed; most workers did not find jobs in the months following the expiration of their UI benefits. As a result, jobless workers were deprived of necessary financial assistance.
When looking at California, the authors found that the state saw a 48-percetage point decrease in unemployed workers receiving UI benefits due to the expiration of pandemic-expanded programs. Additionally, the expiration of these programs disproportionately impacted already vulnerable groups. Blacks, women, older people, and less educated individuals were more likely than other groups to be enrolled in pandemic UI benefits, such as the Pandemic Emergency Unemployment Compensation (PEUC), as opposed to regular UI programs. They were, therefore, more likely to be affected by program expirations.
Eighteen states terminated expanded UI benefits early, claiming the programs disincentivized unemployed workers from returning to work. However, as with the country as a whole, these states did not see a meaningful increase in the number of employed workers after the termination of these programs. Instead, the authors found that these states lost out on a fiscal stimulus as money from the programs could no longer be used to support the economy.
Till von Wachter is a professor of economics and the Faculty Director at California Policy Lab at University of California, Los Angeles. He is co-editor of RSF journal issue “The U.S. Labor Market During and After the Great Recession,” a former RSF visiting scholar, and the recipient of multiple RSF research grants.
Read the press release.
Read the full report.
Read a write up of the report in The Sacramento Bee.
Listen to von Watcher discuss the findings in an interview with Capital Public Radio.
Learn more about the RSF grant that funded this project.