Unemployment Insurance Program Research Articles

Racialized feedback and social welfare receipt: disentangling duration and dollar amount mechanisms on policy feedback effects

ABSTRACT This paper examines how the resources associated with the Temporary Assistance for Needy Families program, the Supplemental Nutrition Assistance Program, and the Unemployment Insurance program affect political participation. The research on policy feedback on mass publics has produce greater results relative to research on feedback and political participation. However, prior research has not disaggregated resource feedback effects thoroughly enough to decipher whether the monetary resources provided by a social welfare program are independent of the effects of the duration of receipt nor have they disaggregated the effects by race to estimate the racialized feedback effects. This is crucial because the primary questions surrounding the development of social welfare programs are: who should get it, how much they should get, and how long they should get it for. Research has also found that social welfare programs can produce disparate resource feedback effects, both encouraging and discouraging participatory behavior. To answer these questions, I utilize the 1997 National Longitudinal Survey of Youth. I incorporate three comprehensive measures of social welfare receipt which allow the estimation of the effects over time. I find that the amount of aid received, and the duration of receipt are both significant factors in shaping participatory behavior but depending on the program I find heterogeneous effects. The disparate effects persist across social welfare programs and race.

Analysis of Strategy 345 as an Effort to Achieve Participation Targets in BPJS Ketenagakerjaan

BPJS Ketenagakerjaan has the task and function of administering Employment Social Security through 5 Employment Social Security Programs, namely Employment Injury Insurance Program (EII), Death Benefit Program (DB), Old-Age Benefit Program (OAB), Pension Benefit Program (PB), and Unemployment Insurance Program (UI). The aim of this research is to analyze 345 strategies in an effort to achieve the target of membership in BPJS Ketenagakerjaan. This study used qualitative research methods. The data collection technique in this research is a literature study obtained from Google Scholar and internal research carried out internally at BPJS Ketenagakerjaan. The collected data was analyzed in three stages: data reduction, data presentation, and drawing conclusions. The research results show that the 345 strategy is the right strategy to increase membership with 3 main programs, namely retention, intensification, and expansion, with 4 focuses, namely village ecosystems, market ecosystems, e-commerce and SMEs, and vulnerable workers through 5 engines, namely agency systems, figures, supply chain, auto debit, compliance, and positive supervision. This strategy can increase public awareness, increase coverage, or increase BPJS Ketenagakerjaan participation regarding the benefits of the EII, DB, OAB, PB, and UI programs, as well as increase BPJS Ketenagakerjaan program participants.

Flexicurity, education and optimal labour market policies

AbstractThe paper provides a theoretical rationale for flexicurity policies, consisting of low employment protection, generous unemployment insurance and active labour market programmes. Education efforts give access to high productivity firms, more likely to survive and thus exposing less their workers to unemployment risk. Activation programmes support reallocation from risky and unproductive to safer and more productive firms, reducing unemployment. Low employment protection can provide incentives for self‐insurance against unemployment risk through education, mitigating the moral hazard cost of unemployment insurance and activation programmes. The paper identifies conditions for flexicurity to be optimal and confronts theoretical predictions to the data.

Income Support Policy Packages and Birth Outcomes in U.S. States: An Ecological Analysis.

Research suggests that generous social welfare programs play a role in maternal and child health. However, most studies examine a single policy in isolation. Drawing from research documenting low-income families 'packaging' of social policies, we create a novel measure summarizing the value of a collection of income support policies for the working poor. This collection includes: the Supplemental Nutrition Assistance Program (SNAP), the Earned Income Tax Credit (EITC), the minimum wage, and the unemployment insurance (UI) program. Using U.S. state-level administrative data from 1996 to 2014, we estimate fixed effects regression models to examine the relationship between birth outcomes and income support policies (individually and combined). We find that increases in the combined value of the four income supports are significantly associated with reductions in preterm births and low birthweight births, but not infant mortality rates. States with the highest observed levels of combined income support had 14% fewer PTBs and 7% fewer LBWs than states with the lowest levels of income support. Of the four individual income support policies, only unemployment insurance has no significant independent effects. SNAP benefits have the largest and most consistent effects, reducing poor birth outcomes across all three indicators. An annual increase of $1000 in SNAP benefits is associated with a 3% decline in infant deaths, 5% decline in preterm births, and 2% decline in low birthweight births. These results suggest that increasing the generosity of income support policies may be a promising strategy for improving birth outcomes in the United States.

Large motherhood penalties in US administrative microdata

Whereas previous research has described motherhood penalties in US survey data, we leverage administrative data on 811,000 quarterly earnings histories from the US Unemployment Insurance program. We analyze contexts where smaller motherhood penalties might be expected: couples where the woman outearns her male partner prior to childbearing, at firms that are headed by women, and at firms that are predominantly women. Our startling result is that none of these propitious contexts appear to diminish the motherhood penalty, and indeed, the gap often increases in magnitude over time following childbearing. We estimate one of the largest motherhood penalties in "female-breadwinner" families, where higher-earning women experience a 60% drop from their prechildbirth earnings relative to their male partners. Turning to proximate mechanisms, women are less likely to switch to a higher-paying firm postchildbearing than men and are substantially more likely to quit the labor force. On the whole, our findings are discouraging relative even to existing research on motherhood penalties.

The Effects of State Business Taxes on Plant Closures: Evidence from Unemployment Insurance Taxation and Multiestablishment Firms

Abstract This paper investigates the extent to which state-level differences in business taxes influence the location decisions of multiestablishment firms. Each state in the United States administers their own unemployment insurance program, and cross-state variation leads to significant tax differences across state lines. This decentralized administration creates opposing employment incentives on the intensive and extensive margins depending on the economic conditions. Studying the locations of multistate manufacturing firms, I find that firms are more likely to exit from high-tax states during economic downturns, but high-tax plants experience more stable employment during nonrecession years.

Wellbeing Consequences of Unemployment and Working with a Job Dissatisfaction in Turkey

This study aims to answer the following two questions. First, are the unemployed unhappy compared to the employed? Second, are unemployed individuals even unhappier compared to people who are unsatisfied with their job? We utilize the the Life Satisfaction Survey’s individual level data between 2004-2020 period. The LSS survey is a nationally representative survey with more than 324,000 observations in 17 years. Firstly, after controlling for household income, the unemployed have a considerably lower wellbeing than the employed. However, compared to employed people who are dissatisfied with their job, the unemployed’s wellbeing is statistically significantly higher. Thus, it appears that unemployment is a negative life event in Turkey as in elsewhere, but so is working in a toxic job. Moreover, we find strong gender effects as males and particularly married males suffer more from unemployment. Also, a quarter of the unemployed report that they feel social pressure due to unemployment. These findings suggest that social approval plays some role in the impact of unemployment. Our findings imply that societies similar to Turkey in terms of labor market would be better off with some unemployment insurance program as it signals to potential quitters that some unemployment is tolerated by society.

Recovery from the COVID-19 Recession: Uneven Effects among Young Workers?

Abstract In this paper, we examine the labor market recovery from the COVID-19 recession and test for effects of termination of pandemic unemployment insurance programs among 15–24-year-olds. We use data from the January 2016–October 2022 Current Population Survey. Using regression-based methods, we show that while 15–19-year-olds experienced a brisk, full recovery in labor market outcomes from the COVID-19 recession, the recovery was sluggish and incomplete among 20–24-year-olds, with some work outcomes lagging below pre-pandemic norms well into 2022. Termination of pandemic UI programs led to increased work hours and full-time employment among 20–24-year-olds but did not have these effects among 15–19-year-olds.

Racial disparities in unemployment benefits among U.S. mortgage borrowers during COVID-19.

The online version contains supplementary material available at 10.1007/s10901-022-10006-w.

The impact of unemployment insurance on reinsertion wages in 2015 in the rural environment of Brazil

Abstract: This work sought to provide new evidence on the impact of the Brazilian Unemployment Insurance Program (Programa Seguro-Desemprego) on the reinsertion wages of its beneficiaries, considering the Brazilian rural environment. Datafrom the National Household Sample Survey (Pesquisa Nacional por Amostra de Domicílios- PNAD) of 2015 was used, as well as the Sharp model discontinuity regression method. The results showed a positive effect on the reinsertion wages of individuals who participated in the Unemployment Insurance Program in rural Brazil. When disaggregating by Brazilian regions, the Southeast region had a greater positive effect on reinsertion wages, while the Midwest region has a negative effect on workers who participated in the Unemployment Insurance Program. Among the main conclusions, it is a fact that the Unemployment Insurance program had a positive effect for Brazilian formal rural workers residing in the Southeast of the country, but a negative effect for those residing in the Center-West region of Brazil.

Urban commuting time and sick-leave medical license use: An empirical study of Santiago, Chile

We use a large dataset from the Chilean unemployment insurance program covering 20% of all formal sector workers to study the impact of commuting time on the likelihood of sick-leave in Santiago, Chile. Our empirical results indicate that longer commuting times are associated with an increase in the probability of sick-leave work absence. A 20% decrease in commuting times would generate close to 36 million dollars per year in productivity benefits. Our results also suggest that commuting travel time improvements targeted to women, lower paid workers and relatively older workers would provide the highest benefits in terms of lowering sick-leave behavior. We also find evidence that mobility infrastructure investments, such as metro and commuter rail expansions, reduce the probability of sick-leave. The results of this paper have implications for measuring the social costs of congestion and for the estimation of the wider economic benefits of transport projects.

Minimum Wage, Unemployment Insurance and Universal Basic Income in a Wealth Concentration Process: A Theoretical Approach

Abstract: Ortiz and Castillo (2020) built a multisector economic model where concentration of capital ownership diminishes the society´s purchasing power capacity. After some concentration threshold is overcome, labour unemployment rises due to the lack of effective demand, the wage rate must be set to the minimum, and distribution of income shifts in favour of capital. Based on that approach, this paper analyses two alternative policies: an unemployment insurance and a universal basic income. The unemployment insurance program is fairer than the competitive outcome but it is not efficient, whilst the optimal universal basic income is fairer and efficient. An minimum wage rate that minimizes the unemployment rate is also found.

Incomplete program take-up during a crisis: evidence from the COVID-19 shock in one U.S. state

In the U.S., means-tested cash, in-kind assistance, and social insurance are part of a patchwork safety net, often run with substantial involvement of state and local governments. Take-up–participation among eligible persons in this system is incomplete. A large literature points to both neo-classical and behavioral science explanations for low take-up. In this paper, we explore the response of the safety net to COVID-19 using newly-collected survey data from one U.S. state–Utah. The rich Utah data ask about income and demographics as well as use of three social safety net programs which collectively provided a large share of relief spending: the Unemployment Insurance program, a social insurance program providing workers who lose their jobs with payments; the Supplemental Nutrition Assistance Program, which provides benefit cards for purchasing unprepared food at retailers; and Economic Impact Payments, which provided relatively universal relief payments to individuals. The data do not suffice to determine eligibility for all of the programs, so we focus on participation per capita. These data also collect information on several measures of hardship and why individuals did not receive any of the 3 programs. We test for explanations that differentiate need, lack of information, transaction costs/administrative burden, stigma, and lack of eligibility. We use measures of hardship to assess targeting. We find that lack of knowledge as well as difficulty applying, and stigma in the UI program each play a role as reasons for not participating in the programs.

Administrative Errors and Race: Can Technology Mitigate Inequitable Administrative Outcomes?

AbstractScholars have long recognized the role of race and ethnicity in shaping the development and design of policy institutions in the United States, including social welfare policy. Beyond influencing the design of policy institutions, administrative discretion can disadvantage marginalized clientele in policy implementation. Building on previous work on street-level bureaucracy, administrative discretion, and administrative burden, we offer a theory of racialized administrative errors and we examine whether automation mitigates the adverse administrative outcomes experienced by clientele of color. We build on recent work examining the role of technological and administrative complexity in shaping the incidence of administrative errors, and test our theory of racialized administrative errors with claim-level administrative data from 53 US unemployment insurance programs, from 2002 to 2018. Using logistic regression, we find evidence of systematic differences by claimant race and ethnicity in the odds of a state workforce agency making an error when processing unemployment insurance claims. Our analysis suggests that non-white claimants are more likely to be affected by agency errors that result in underpayment of benefits than white claimants. We also find that automated state–client interactions reduce the likelihood of administrative errors for all groups compared to face-to-face interactions, including black and Hispanic clientele, but some disparities persist.

Is there a long-run relationship between the unemployment insurance and the labor force participation rate in the USA? A nonlinear analysis

PurposeThis paper explores the evidence of a long-run co-movement between aggregate unemployment insurance spending and the labor force participation rate in the USA. The unemployment insurance (UI) program tends to expand during an economic downturn and contract during an expansion. UI may incentivize unemployment and may also facilitate better matching in the labor market. Statistical evidence of the presence of a co-movement will thus shed new light on their dynamics.Design/methodology/approachThis research applies time-series econometric approach using monthly data from 1959:1 to 2020:3 to test threshold cointegration and estimate a threshold vector error-correction (TVEC) model. The estimates from the TVEC model investigating the nature of short-run dynamics.FindingsThe Enders and Siklos (2001) test find evidence of threshold cointegration between the two indicating the presence of long-run co-movement. The estimates from the TVEC model investigating the nature of short-run dynamics find evidence that the growth in aggregate UI spending and the growth in labor force participation rate adjust simultaneously to maintain the long-run co-movement above the threshold in the short run. The author also observes the same short-run dynamics for the growth in aggregate UI spending and the growth in the labor force participation rate for females.Research limitations/implicationsThis model is bi-variate by construction and does not address causality.Practical implicationsThe author argues that the UI program positively impacts the female labor market outcomes, for example, better matching. This finding may explain the upward trend in the labor force participation rate for females in the USA.Social implicationsThe research findings may justify the transfer programs for minority and immigrants.Originality/valueThis is first research that analyzes the UI programs impact on the labor force participation using a macroeconometric approach. To the best of the author's knowledge, this is the first study in this genre.

Should unemployment insurance be centralized in a state union? Unearthing a principle of efficient federation building*

AbstractOur study compares the efficiency of unemployment insurance programs in a state union. A centralized insurance will pool the cost of unemployment; this results in a collective bargaining in the member states, which leads to excessively high wages and inefficient insurance. Those high wages attract workers who reduce the outsourced economic cost of unemployment. Only with perfect mobility, this opposing migration effect completely outweighs the pooling effect, and the insurance is no longer inefficient when centralized. Furthermore, we conclude that a principle of efficient federal systems might be that fiscally linked economic policies and institutions should be governed on the same federative level.

Unemployment insurance programs and the choice to leave the labor force

AbstractI extend a labor‐market search and matching model of equilibrium with unemployment insurance (UI) program to incorporate the choice to participate in the labor market. UI reform that lowers the UI payment increases search intensity but discourages labor‐market participation. Reducing UI payments has the moral‐hazard effects derived in the literature but also a non‐participation effect. UI reform in North Carolina in mid‐2013 provides an empirical test of the model using data from the Current Population Survey. The reduction in size and duration of UI payments led to no significant increase in employment but a significant increase in those exiting the labor force.

Socioeconomic Effects of COVID-19 in Mexico: A Multisectoral Approach and Policy Options

The health crisis caused by the spread of COVID-19 has caused a profound social and economic disruption in Mexico. Our purpose in this paper is to contribute to the knowledge about the economic impact of the pandemic in Mexico and to evaluate social policy options to mitigate its effects. We do so based on a multisectoral-multiplier model and the most recent Social Accounting Matrix for Mexico, with which we estimate the direct and indirect impacts of COVID-19 as well the likely effects of two alternatives for mitigating them: an unconditional cash transfer scheme for households living in poverty, and the establishment of an unemployment insurance program for workers who have lost their jobs during the pandemic. We find that the first alternative alleviates more value added and loss of income, and thus has a greater effect in reducing inequality and the incidence of poverty.

Unemployment in the days of Covid: will the Canadian unemployment insurance program survive the pandemic?

Governed by Austerity, the Canadian unemployment regime stopped delivering a proper wage replacement coverage starting in 1995. Nowadays, the situation is far from showing better results. For the year 2018-2019, only 40% of those who contributed through their wages to the Unemployment Fund were deemed eligible to an unemployment benefits period. Without any surprise, precarious workers had been largely denied such benefits. Those same workers are often active in the service sector, a sector that largely contributes to the GDP increase in Canada. In the Covid context, Canada looked for income replacement answers outside the Unemployment regime and relied on social tax expenditures by creating programmes that showed their flexibility and agility. Those who had to stop working or reduce their working hours - either because they were affected by the virus or had to take care of an affected member of their household - were well served by those programmes. Are social tax expenditures, also called cash transfer programmes, showing the way for the future? Or, can a contributory model like the unemployment regime in Canada adapt to the needs of the workers in the post Covid era?

Conditional Generosity and Deservingness in Public Support for European Unemployment Risk Sharing*

AbstractPrevious research into public support for welfare solidarity often refers to the importance of ‘reciprocity’, which means that generous social benefits are supported if they are matched by credible commitments to contribute by those who can. The current article adds to this body of literature by providing novel empirical evidence on the roles of generosity and conditionality in support for European unemployment insurance programmes. Drawing on a conjoint survey experiment in 13 European countries, we show that Europeans may be motivated by an ethos of reciprocity, since policy proposals that are both generous and conditional are the most popular among the general population. However, conditional generosity seems to have much more traction among those who consider the unemployed as undeserving, suggesting that EU‐level policies may succeed in overcoming the diffidence of welfare sceptics if reciprocity is ensured in the architecture of the policy design.