We study the ways in which unemployment insurance (UI) benefits interact with other elements of the social safety net around job losses. We exploit a cutoff for UI eligibility, based on a workers' highest quarterly earnings in the past year, to generate quasi-experimental variation in UI receipt. We find that UI receipt cuts welfare (TANF) receipt by half among low-earning UI applicants but has no impact on SNAP or Medicaid usage. However, because welfare participation is low in this population, overall crowdout is small. In the quarter following layoff, UI increases total income by 55 percent (including labor earnings and transfers).
Leung, Pauline, and Christopher O'Leary.
"Unemployment Insurance and Means-Tested Program Interactions: Evidence from Administrative Data."
American Economic Journal: Economic Policy,
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
National Government Expenditures and Welfare Programs
Health: Government Policy; Regulation; Public Health
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Unemployment: Models, Duration, Incidence, and Job Search
Unemployment Insurance; Severance Pay; Plant Closings