Support for this project was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.
Summary
To better understand the kinds of long-term reforms that are needed, we use the Current Population Survey (CPS) to develop a microsimulation model of the major elements of the U.S. unemployment insurance system prior to and for the duration of the COVID-19 pandemic. We build on methodology developed by Cortes and Forsythe (2021) and Ganong et al. (2020) to develop the microsimulation model. Our microsimulation model consists of replicating the rules/eligibility standards of three components of the UI systems in each U.S. state: 1) non-monetary eligibility, 2) monetary eligibility, and 3) benefit generosity to determine a weekly benefit amount (WBA) for each respondent in our CPS Basic Monthly sample. In the pandemic period, which we define as starting in March 2020, we model full and partial Unemployment Compensation (UC or traditional UI), Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic Unemployment Compensation (FPUC). We benchmark the results of our model using publicly available aggregate administrative data reported by the DOL and BEA for number of UI weeks compensated, total expenditures, and average payments. We use this model to simulate a series of counterfactual policy reforms to the unemployment insurance system to test how alternative decisions by policymakers could have changed population-level and subgroup outcomes.
