NBER

Peter Ganong, Pascal J. Noel, Joseph S. Vavra

Bibliographic Information

NBER Working Paper No. 27216
Issued in May 2020
NBER Program(s):EFG, LS, ME, PE

A non-technical summary of this paper is available in the July 2020 NBER Digest.  You can sign up to receive the NBER Digest by email.

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Abstract

We use micro data on earnings together with the details of each state’s UI system under the CARES Act to compute the entire distribution of current UI benefits. The median replacement rate is 134%. Two-thirds of UI eligible workers can receive benefits which exceed lost earnings and one-fifth can receive benefits at least double lost earnings. There is sizable variation in the effects of the CARES Act across occupations and states, with important distributional consequences. We show how alternative UI expansion policies would change the distribution of UI benefits and thus affect resulting liquidity provision, progressivity, and labor supply incentives.

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