.

Antipoverty Effects of Unemployment
Insurance
Thomas Gabe
Specialist in Social Policy
Julie M. Whittaker
Specialist in Income Security
October 7, 2011
Congressional Research Service
7-5700
www.crs.gov
R41777
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Antipoverty Effects of Unemployment Insurance

Summary
This report examines the antipoverty effects of unemployment insurance benefits over the past
recession and through the beginning of the economic recovery. The analysis highlights the impact
of the additional and expanded unemployment insurance (UI) benefits available to unemployed
workers through the American Recovery and Reinvestment Act (ARRA, P.L. 111-5) and the
Emergency Unemployment Compensation (EUC08) program (Title IV of P.L. 110-252). In 2010,
approximately 66% of all unemployed individuals were receiving UI benefits and thus were
directly impacted by legislative changes to the UI system. UI benefits appear to have a large
poverty-reducing effect among unemployed workers who receive them. Given the extended
length of unemployment among jobless workers, the additional weeks of UI benefits beyond the
regular program’s 26-week limit appear to have had an especially important effect in poverty
reduction.
Estimates presented in this report are based on Congressional Research Service (CRS) analysis of
24 years of data from the U.S. Census Bureau’s Annual Social and Economic Supplement to the
Current Population Survey (CPS/ASEC), administered from 1988 to 2011. The period examined
includes the three most recent economic recessions.
This report contributes to recent research on the antipoverty effects of unemployment insurance
in several ways. Its period of analysis allows comparisons across the three most recent recessions.
The report includes estimates of the effects on the poverty rate for the unemployed, for those
receiving UI, and for families that report at least one family member receiving UI. It also
estimates how much of reported UI benefits went directly to decreasing family poverty levels.
This report’s analysis shows that UI benefits appear to reduce the incidence of poverty
significantly among the population that receives them. The UI benefits’ poverty reduction effects
appear to be especially important during and immediately after recessions. The analysis also finds
that there was a markedly higher impact on poverty in 2010 than in the previous two recessionary
periods. The estimated antipoverty effects of UI benefits in 2010 were about twice that of two
previous peak years of unemployment—1993 and 2003.
• In 2010, over one-quarter (27.5%) of unemployed people who received UI
benefits would have been considered poor prior to taking UI benefits into
account; after counting UI benefits, their poverty rate decreased by over half, to
12.5%.
• UI receipt affects not only the poverty status of the person receiving the benefit,
but the poverty status of all related family members, as well. In 2010, while an
estimated 12.4 million people reported UI receipt during the year, an additional
19.4 million family members lived with the 12.4 million receiving the benefit.
Consequently, UI receipt in 2010 affected the income status of some 31.9 million
persons.
• The poverty rate for persons in families who received unemployment benefits in
both 2009 and 2010 was approximately half of what it would have been without
those unemployment benefits.
• In 2010, UI benefits lifted an estimated 3.2 million people out of poverty, of
which well over one quarter (26.8%, 861,000) were children living with a family
member who received UI benefits.

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Antipoverty Effects of Unemployment Insurance

Contents
Introduction...................................................................................................................................... 1
Roadmap .......................................................................................................................................... 1
Labor Market Context...................................................................................................................... 3
Unemployment Insurance................................................................................................................ 8
Changes in the Structure and Generosity of Unemployment Insurance.................................. 10
Temporary Federal Unemployment Insurance Programs, 1987-2010............................... 10
Interaction of the American Recovery and Reinvestment Act of 2009 (ARRA; P.L.
111-5) with Unemployment Benefits ................................................................................... 12
How Important Were the Temporary Programs to the Unemployed?...................................... 13
Antipoverty Effects of Unemployment Insurance ......................................................................... 15
Antipoverty Effects of UI on All Persons................................................................................ 16
Antipoverty Effect of UI on Persons in Families Receiving UI Benefits................................ 19
Aggregate UI Dollars Going Towards Reducing Poverty ....................................................... 21
Antipoverty Effect of UI Benefits Among Unemployed Individuals ...................................... 24
Summary........................................................................................................................................ 26

Figures
Figure 1. Monthly and Annual Average Unemployment Rate......................................................... 4
Figure 2. Median Duration of Unemployment among Unemployed Workers in Weeks,
January 1987 to September 2011.................................................................................................. 5
Figure 3. Unemployment Rate and an Alternative Measure of Underutilization (BLS U-6
Definition) .................................................................................................................................... 7
Figure 4. Percent of Unemployed Receiving Unemployment Benefits......................................... 14
Figure 5. Percentage of Unemployed Receiving Temporary (EUC, TEUC, or EUC08)
Benefits or Extended Benefits .................................................................................................... 15
Figure 6. Pre- and Post-UI Benefit Poverty Rates of Persons, 1987-2010 .................................... 17
Figure 7. Number of Persons Lifted Above Poverty as a Result of UI Benefit Receipt,
1987-2010................................................................................................................................... 18
Figure 8. Pre- and Post-UI Benefit Poverty Rates of Persons in Families that Received UI
Benefits, 1987-2010.................................................................................................................... 19
Figure 9. Percent Reduction in the Poverty Rate as a Result of UI Benefit Receipt,
Overall Poverty Rate and Poverty Rate for Persons in Families that Received
UI Benefits, 1987 - 2010 ............................................................................................................ 20
Figure 10. UI Benefits: Aggregate Dollars and Dollars Reducing Poverty, 1987-2010 ................ 22
Figure 11. Share of Aggregate UI Benefits Going Toward Reducing Poverty, 1987-2010 .......... 23
Figure 12. Pre-Post UI Poverty Rates Among Unemployed Persons Who Received UI
Benefits and Those Who Did Not, 1987-2010............................................................................ 24
Figure 13. Share of Unemployed Persons Who Had No Earnings in the Year, by UI
Receipt, 1987-2010..................................................................................................................... 26
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Antipoverty Effects of Unemployment Insurance

Figure B-1. Persons Who Reported UI Benefit Receipt, by Labor Force Status: 2010................. 31
Figure B-2. Persons Who Reported UI Benefit Receipt, by Labor Force Status: 2010................. 31
Figure B-3. Share of Unemployed and Underutilized Workers at Any Time During the
Year Compared to Monthly and Annual Average Unemployment ............................................. 33
Figure B-4. Expanded Definitions of Unemployment and Labor Underutilization, 1987-
2010 ............................................................................................................................................ 34
Figure B-5. An Expanded Definition of Unemployed and Underutilized Workers, 1987-
2010 ............................................................................................................................................ 35
Figure B-6. Unemployment Insurance Receipt Among Persons, by Selected Labor Force
Status, 1987 – 2010..................................................................................................................... 37
Figure C-1. UI Recipients and Aggregate UI Dollars CPS/ASEC Estimates as a Percent
of Administrative Benchmarks 1987 to 2010 ............................................................................. 39

Tables
Table 1. General Description of Temporary Federal Unemployment Insurance Programs,
1987- 2010.................................................................................................................................. 11

Appendixes
Appendix A. Legislative Details of the Emergency Unemployment Compensation
(EUC08) Program....................................................................................................................... 28
Appendix B. Trends in Labor Force Status and UI Receipt Over Time ........................................ 29
Appendix C. CPS/ASEC Estimates Versus Administrative Benchmarks...................................... 38

Contacts
Author Contact Information........................................................................................................... 40

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Antipoverty Effects of Unemployment Insurance

Introduction
A period of unemployment greatly increases the odds that a worker and members of the worker’s
family will be counted among the nation’s poor. For example, among persons between the ages of
16 and 64 who were unemployed in early 2011, over one in four (26.4%) were poor based on
their families’ incomes in 2010; among those who were employed, 6.9% were poor.1
A variety of social insurance benefits may be available for unemployed workers. The benefits
analyzed in this report can be generically grouped into the category of Unemployment Insurance
(UI) benefits. UI benefits provide a cash supplement to replace a portion of lost wages to
qualified unemployed individuals. Two main objectives of the joint federal-state unemployment
insurance program are to provide temporary and partial wage replacement to involuntarily
unemployed workers and to stabilize the economy during recessions.2
As a temporary, partial replacement of lost earnings due to job loss, the benefits workers receive
may help to prevent them and their family members from reaching poverty, an ancillary but
important role of the program. Unemployment benefits are an individual worker’s entitlement (as
long as that worker meets the criteria for the benefit) and are not means tested.3 In this regard, the
UI program, while not a poverty program per se, can play an important role in reducing poverty
associated with job loss.
Additionally, as a countercyclical program UI has a macroeconomic effect in reducing poverty.
By injecting dollars into the economy directed toward those who have experienced job loss, UI
helps to partially mitigate income loss among a group directly affected by economic downturn,
and it thereby temporarily augments the ability of unemployed workers to meet basic needs,
which further stimulates the economy. In this regard, the macroeconomic effect of UI helps
dampen the tendency for poverty to increase during periods of economic downturn.
Roadmap
This report examines the antipoverty effects of unemployment insurance (UI) benefits over the
past three recessions. The analysis especially focuses on the most recent recession, from which
the economy has only just begun to recover. It highlights the impact of the additional and
expanded benefits available to unemployed workers in response to the most recent recession.
Estimates presented in this report are based on Congressional Research Service (CRS) analysis of
24 years of data from the U.S. Census Bureau’s Annual Social and Economic Supplement to the
Current Population Survey (CPS/ASEC), administered from 1988 to 2011. The period examined

1 CRS Report RL33069, Poverty in the United States: 2010, by Thomas Gabe.
2 See, for example, President Franklin Roosevelt’s remarks at the signing of the Social Security Act at
http://www.ssa.gov/?history/?fdrstmts.html#signing.
3 By interpretation, entitlement to unemployment benefits cannot be restricted by means tests. See the Labor
Secretary’s interpretation on means testing and conformity to U.S. federal law http://ows.doleta.gov/dmstree/uipl/
uipl_pre75/uipl_787.htm.
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Antipoverty Effects of Unemployment Insurance

includes three economic recessions (July 1990 to March 1991, and March 2001 to November
2001, each lasting 8 months; and December 2007 to June 2009, lasting 18 months).4
In examining the role of UI benefits in alleviating poverty, this report does not consider any
behavioral changes that individuals, employers, or government would have made had the UI
benefit structure remained at permanent law levels throughout the period of analysis. In fact, if
the temporary congressional increases in UI benefits had not existed, economic conditions would
have been different. Some beneficiaries would have altered their behavior in a variety of ways.
Some would have taken a job earlier or relied on additional hours of work from a spouse. Some
would have chosen to terminate their job search earlier and move into retirement or apply for
disability benefits. Absent the additional UI benefits, some might have qualified for other
government benefits (e.g., food stamps) for which they otherwise would not have been eligible.
Additionally, some employers also would have made different decisions about hiring and laying
off workers.
This report also ignores several important changes in the labor market that have impacted both
the unemployment rate and the poverty rate during this period. The aging of the labor market over
time has generally decreased the unemployment rate. This decrease is tempered by the increased
duration of unemployment as a result of the older profile of the labor market.5 At the same time,
workers are less likely to be laid off temporarily and more likely to become permanently
separated from their former job.6
The report begins with a short section depicting labor market conditions over the 24-year period
examined. Next is a section describing the Unemployment Insurance system, in terms of the
permanent UI structure as well as the temporary measures Congress has enacted in reaction to
poor economic conditions.
A third section examines the effect of UI benefit receipt on an individual’s poverty status. It
provides estimates of the number of persons who would fall below the nation’s official income
poverty threshold if UI benefits received were not counted as income, and the number lifted
above the poverty threshold when they are, as well as estimates of the share of unemployed
persons who are poor, according to whether they received UI benefits during the year. A brief
summary assesses the relative effects of the Unemployment Insurance system on poverty during
the past recession compared to two preceding recessions.
The report contains three appendices. Appendix A provides additional legislative details on the
temporary measures enacted by Congress during the most recent recession—the Emergency
Unemployment Compensation (EUC08) program.

4 Periods of economic recession are officially designated by the National Bureau of Economic Research (NBER)
Business Cycle Dating Committee. See http://www.nber.org/cycles/main.html.
5 For an example, see U.S. Congress, House Committee on Ways and Means, Subcommittee on Income Security and
Family Support, What Does the Unemployment Rate Indicate About the Weak Labor Market?, 110th Cong., 2nd sess.,
April 10, 2008, http://www.brookings.edu/~/media/Files/rc/testimonies/2008/0410_unemployment_blank/
0410_unemployment_blank.pdf.
6 For an example, see Chart 1 in Wayne Vroman, The Great Recession, Unemployment Insurance and Poverty, Urban
Institute, Paper Prepared for the Conference on Reducing Poverty and Economic Distress after ARRA, Washington,
DC, January 15, 2010, http://www.urban.org/uploadedpdf/412072_great_recession.pdf.
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Appendix B provides data on trends in UI receipt by an individual’s labor market status during a
year. It provides contextual reference of different measures of labor “underutilization,” including
monthly and annual monthly averages of unemployment compared to estimates for persons
unemployed at any time during the year (the definition of unemployed used in the report’s
CPS/ASEC analysis). It also examines more expansive definitions of labor utilization, which in
addition to the unemployed (persons without a job who looked for work) includes involuntary
part-time workers and discouraged workers (those who did not search for work, believing suitable
work is not available). This appendix examines UI receipt reported on the CPS/ASEC among
persons of the above, and other, labor force statuses.
Appendix C compares CPS/ASEC estimates to UI administrative data benchmarks. It assesses
the relative quality of the CPS/ASEC UI estimates over the 24-year period examined in the
report. The CPS/ASEC data undercount UI benefit receipt.7 As a result, this report may
underestimate the effect of unemployment insurance upon poverty rates.
Labor Market Context
Figure 1 depicts the U.S. monthly and annual average monthly unemployment rate8 from January
1987 to September 2011. The figure shows that in each of the three recessions over the period, the
unemployment rate is typically at a cyclical low just prior to the onset of economic recession, and
it tends to continue to rise well beyond the recession’s official end. As economic growth begins to
take hold at a recession’s end, employers are typically cautious in hiring new workers, waiting to
be assured that economic growth is likely to persist. Job growth begins to take hold once existing
labor capacity becomes stretched and the hiring of additional workers is required to meet
increasing demand for employer-provided goods and services. The figure shows that in the 1990-
1991 recession, unemployment rose from a pre-recession low of 5.0% in March 1989 to a post-
recession high of 7.8% in June 1992, which was some 15 months after the recession’s official
end. In the subsequent 2000 recession, the unemployment rate rose from a pre-recession low of
3.8% in April 2000 to a high of 6.3% in June 2003, which was some 19 months after the
recession’s end. In the most recent recession, the unemployment rate rose from a pre-recession
low of 4.4% in May 2007 to a post-recession high of 10.1% in October 2009, which was four
months after the recession’s official end. Nearly two years since its most recent peak, the
unemployment rate in September 2011 stood at 9.1%.

7 Bruce D. Meyer, Wallace K. C. Mok, and James X. Sullivan, The Under-Reporting of Transfers in Household
Surveys: Its Nature and Consequences, National Bureau of Economic Research, NBER Working Paper No. 15181, July
2009, http://www.nber.org/papers/w15181.
8 The unemployment rate measures the number of persons who are without a job or on layoff who are actively seeking
work, as a percent of the civilian labor force (the sum of employed and unemployed individuals).
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Antipoverty Effects of Unemployment Insurance

Figure 1. Monthly and Annual Average Unemployment Rate
(January 1987 to September 2011)
Percent
11
Oct-09,
10.1
Recessionary Period
10
Monthly Unemployment Rate
Annual Average of Monthly Unemployment Rate
Sep-11,
9
9.1
Jun-92,
Mar-11,
7.8
8.8
8
7
Jun-03,
6.3
6
5
Mar-89,
5.0
4
May-07,
4.4
Apr-00,
3.8
3
01
91
09
3/
11/
6/
2
o
o
o
90 t
01 t
07 t
7/
3/
12/
1
0
7
1
4
5
8
9
2
6
9
n-89
-90
n-93
n-96
n-97
n-00
-01
n-03
n-04
-05
n-07
n-08
n-11
Jan-8
Jan-88 Ja
Jan
Jan-9
Jan-92 Ja
Jan-9
Jan-9
Ja
Ja
Jan-9
Jan-9
Ja
Jan
Jan-0
Ja
Ja
Jan
Jan-0
Ja
Ja
Jan-0
Jan-10 Ja
Date

Source: Figure prepared by the Congressional Research Service (CRS) based on U.S. Bureau of Labor Statistics
(BLS) monthly unemployment rates, available at http://data.bls.gov/cgi-bin/surveymost?bls.
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In addition to the recession’s length and sustained elevated unemployment rate, the duration of an
individual’s spell of unemployment is another indicator of labor market stress. Figure 2 depicts
the median number of weeks workers report having been unemployed. The figure shows that
among unemployed workers, the median duration of unemployment in June 2010 was 25.5
weeks—over half of unemployed persons had been without work for nearly six months. Peak
median duration of unemployment in the aftermath of the most recent recession was over twice as
long as the two previous recessions (11.5 weeks in June 2003, and 10 weeks in October 1994). In
June 2010, the median duration of unemployment (25.5 weeks) was 3.5 times that of workers
preceding the recession (June 2006, 7.3 weeks), and between 4.9 times (September 2000, 5.2
weeks) to 5.3 times (4.8 weeks, November 1998) the median duration of unemployed workers in
previous periods when the U.S. labor market was at peak employment. Since peaking in June
2010, median duration of unemployment in September 2011 stood at 22.2 weeks.
Figure 2. Median Duration of Unemployment among Unemployed Workers
in Weeks, January 1987 to September 2011
Weeks
32.0
28.0
Recessionary Period
Jun-10,
25.5
Median Number of Weeks Unemployed
91
01
09
Annual Average Median Weeks Unemployed
3/
11/
6/
24.0
o
o
o
t
7/90 t
01 t
/07
3/
12
Sep-11,
22.2
20.0
16.0
Jun-03,
11.5
12.0
Oct-94,
10.0
8.0
Jun-06,
7.3
4.0
Nov-89,
Sep-00,
4.8
5.2
0.0
7
0
3
6
9
2
5
0
n-89
n-92
n-94
n-95
n-97
-98
n-00
-01
n-03
-04
n-06
-07
n-09
Jan-8
Jan-88 Ja
Jan-9
Jan-91 Ja
Jan-9
Ja
Ja
Jan-9
Ja
Jan
Jan-9
Ja
Jan
Jan-0
Ja
Jan
Jan-0
Ja
Jan
Jan-08 Ja
Jan-1
Jan-11
Date

Source: Figure prepared by the Congressional Research Service (CRS) based on U.S. Bureau of Labor Statistics
(BLS) estimates.
An economic downturn may have other effects on the labor market than what is measured by the
unemployment rate alone. For example, some former workers may drop out of the labor force all
together and not bother to search for work, believing that no work is available and that job search
would be fruitless—a category referred to as “discouraged workers.” Others may have recently
searched for work, but are not currently looking for work because of other impediments, such as
transportation problems or problems with child care arrangements, that keep them from actively
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searching for a job. The Bureau of Labor Statistics (BLS) refers to this group as “marginally
attached” workers. For some, an economic downturn may result in a situation where they are
working part time but desire full-time work—a category sometimes referred to as
“underemployed” or “employed part time for economic reasons.”
In addition to the unemployment rate, the Bureau of Labor Statistics (BLS) publishes alternative
measures of labor underutilization.9 The most comprehensive alternative measure, U-6, includes
the unemployed plus “discouraged” and other “marginally attached” workers, as well as persons
who are “employed part time for economic reasons.” The “official” unemployment rate is based
on the total number of unemployed as a percent of the civilian labor force (employed and
unemployed workers, excluding the military). Under the alternative U-6 measure, “discouraged,
marginally attached, and part-time workers for economic reasons” are added to the numerator of
the “official” measure, and “discouraged and marginally attached” workers are added to the
denominator.10

9 For a description of the alternative measures, see John E. Bregger and Steven E. Haugen, “BLS introduces new range
of alternative unemployment measures,” Monthly Labor Review, vol. 108, no. 10 (October 1995), pp. 19-26. Labor
force statistics from the CPS, including alternative measures, are available at http://data.bls.gov/cgi-bin/surveymost?ln.
10 “Persons working part time for economic reasons” are already included in the civilian labor force definition used in
the denominator of the “official” unemployment rate.
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Figure 3 compares the BLS alternative U-6 rate of labor underutilization with the “official”
unemployment rate. Estimates for the U-6 rate are first available in January 1994. In any period,
the alternative expanded measure of labor underutilization, U-6, is considerably higher than the
“official” unemployment rate; but in the wake of economic contractions, in particular, the U-6
measure emphasizes a heightened level of labor market distress compared with the
unemployment rate alone. Over the period examined, the U-6 rate was, on average, 75% above
the “official” unemployment rate, and it ranged from 63% (December 2002) to 83% (April 2008)
above. In October 2009, for example, the unemployment rate was at an historical peak of 10.1%,
while the U-6 labor underutilization rate, also at an historical peak, was 17.4%—7.3 percentage
points (72%) above the “official” unemployment rate. In September 2011, the U-6 labor
underutilization rate was 16.5%—7.4 percentage points (81%) above the “official”
unemployment rate.
Figure 3. Unemployment Rate and an
Alternative Measure of Underutilization (BLS U-6 Definition)
January 1987 to September 2011
Percent
Oct-09,
18
17.4
Recessionary Period
17
Monthly Labor Underutilization Rate (BLS U-6 definition)
Sep-11,
16
16.5
Annual Average of Monthly Underutilization Rate (BLS U-6 definition)
15
Monthly Unemploym ent Rate
14
Annual Average of Monthly Unem ploym ent Rate
13
12
Sep-03,
Jan-95,
11
10.4
Oct-09,
10.2
10.1
10
9
Sep-11,
Jun-92,
9.1
7.8
8
Jun-03,
Dec-06,
7
6.3
7.9
Oct-00,
6
6.8
5
Mar-89,
4
5.0
May-07,
Apr-00,
4.4
3
91
01
3.8
09
3/
6/
2
o
11/
o
o
1
90 t
01 t
07 t
7/
3/
12/
0
1
4
8
1
8
-87
n-89
n-90
n-93
n-96
-97
n-99
n-00
n-03
-04
n-06
n-07
n-10
-11
Jan
Jan-88 Ja
Ja
Jan-9
Jan-92 Ja
Jan-9
Jan-95 Ja
Jan
Jan-9
Ja
Ja
Jan-0
Jan-02 Ja
Jan
Jan-05 Ja
Ja
Jan-0
Jan-09 Ja
Jan
Date

Source: Figure prepared by the Congressional Research Service (CRS) based on U.S. Bureau of Labor Statistics
(BLS) estimates.
Notes: The BLS alternative U-6 measure of labor underutilization includes unemployed, discouraged, marginally
attached, and part-time workers desiring more work hours as a percent of an expanded labor force that includes
all such persons in addition to employed workers.
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Unemployment Insurance
Workers who lose their jobs face serious long-term economic implications. In general, they face a
substantially reduced probability of full-time employment and an increased probability of part-
time employment. Permanently displaced workers (rather than job leavers or those who were on
temporary lay-off) who find new full-time employment experience, on average, significantly
decreased earnings relative to what they earned before they lost employment.11
A variety of benefits may be available for unemployed workers. Those examined in this report
can be generically grouped into the category of “Unemployment Insurance” benefits,12 which
provide a cash supplement to replace a portion of lost wages to qualified unemployed
individuals.13 Most unemployed workers who receive benefits generally receive benefits from the
Unemployment Compensation (UC) program first. Those who exhaust UC benefits may be
eligible for additional weeks of unemployment insurance through the temporary Emergency
Unemployment Compensation (EUC08) benefit or through the permanent extended benefit (EB)
program.14 These three benefits are often collectively referred to as Unemployment Insurance
(UI) benefits. Generally, an unemployed worker would not notice a change in the type of benefit,
as the weekly benefit amount remains constant while the funding stream and/or the legislative
authority for the benefit changes as the unemployed worker moves from one benefit type to
another over the course of his or her spell of unemployment.
Eligibility and Benefit Calculations for Unemployment Benefits
Federal laws and regulations provide broad guidelines on UC benefit coverage, eligibility, and
benefit determination, but the specifics of regular UC benefits are determined by each state. This
results in essentially 53 different programs.15 States determine UC benefit eligibility, payments,
and duration through state laws and program regulations. Generally, UC eligibility is based on

11 For example see Lori G. Kletzer, “Job Displacement,” The Journal of Economic Perspectives, vol. 12, no. 1 (Winter
1998), pp. 115-136 and Henry S. Farber, “What do we know about job loss in the United States? Evidence from the
Displaced Workers Survey, 1984–2004,” Economic Perspectives: Federal Reserve Bank of Chicago, vol. 29, no. 2
(2005), pp. 13-28.
12 See CRS Report RL33362, Unemployment Insurance: Programs and Benefits, by Katelin P. Isaacs and Julie M.
Whittaker for full details.
13 For example, in addition to UI benefits, certain unemployed persons may qualify for continuation of group health
insurance coverage under the Consolidated Omnibus Reconciliation Act of 1985 (COBRA; P.L. 99-272). See CRS
Report: CRS Report R40142, Health Insurance Continuation Coverage Under COBRA, by Janet Kinzer. Also, certain
workers who lose their jobs directly due to increased imports or shifts in production out of the United States may
qualify for Trade Adjustment Assistance for Workers (TAA). See CRS Report R42012, Trade Adjustment Assistance
(TAA) for Workers, by Benjamin Collins.
14 UC benefits may be extended at the state level by the permanent EB program if high unemployment exists within the
state. Once regular unemployment benefits are exhausted, the EB program may provide up to an additional 13 or 20
weeks of benefits, depending on worker eligibility, state law, and economic conditions in the state. Under permanent
law the EB program is funded 50% by the federal government and 50% by the states, although ARRA, as amended,
temporarily provides for 100% federal funding of the EB program.
15 The U.S. Department of Labor (DOL) administers the federal portion of the UC system, which operates in each state,
the District of Columbia, Puerto Rico, and the Virgin Islands. Federal law sets broad rules that the 53 state programs
must follow. These include the broad categories of workers that must be covered by the program, the method for
triggering the EB and EUC08 programs, the floor on the highest state unemployment tax rate to be imposed on
employers (5.4%), and how the states will repay Unemployment Trust Fund (UTF) loans.
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attaining qualified wages and employment in covered work over a 12-month period (called a base
period) prior to unemployment.
The UC program pays benefits to workers in covered employment who become involuntarily
unemployed for economic reasons and meet state-established eligibility rules. The UC program
generally does not provide UC benefits to the self-employed, to those who are unable to work, or
to those who do not have a recent earnings history. States usually disqualify claimants who lost
their jobs because of inability to work or unavailability for work, who voluntarily quit without
good cause, who were discharged for job-related misconduct, or who refused suitable work
without good cause.
This UC benefit is intended to help meet an unemployed worker’s basic obligations until the
worker finds a new position. Generally, states base benefit calculations on wages for covered
work over a 12-month period, and in most states a full-time year-round worker would be eligible
for 26 weeks of benefits.16 The entitlement formula varies by state, typically requiring a
substantial work history and replacing up to 50% of a worker’s wages. Generally, benefits are
capped at a percentage of the average wage for workers in the state and some states do
not automatically link benefits to wage growth; these actions lowered the wage replacement rate
for unemployment benefits to 34% of the average weekly wage for FY2010.17
The permanent law Extended Benefit (EB) program was established by the Federal-State
Extended Unemployment Compensation Act of 1970 (EUCA) (P.L. 91-373; 26 U.S.C. 3304,
note). This program was intended to be the permanent law solution for automatically creating a
federal response to economic downturns. The program may extend receipt of unemployment
benefits (extended benefits) at the state level if certain economic situations exist within the state.
Under permanent law, the costs of these benefits are shared—with 50% paid by federal funds and
50% by state funds.
All states must pay up to 13 weeks of EB if the insured unemployment rate18 (IUR) for the
previous 13 weeks is at least 5% and is 120% of the average of the rates for the same 13-week
period in each of the two previous years. There are two other optional thresholds that states may
choose. (States may choose one, two, or none.) If the state has chosen a given option, they would
provide the following:
• Option 1: an additional 13 weeks of benefits if the state’s IUR is at least 6%,
regardless of previous years’ averages.

16 Arkansas provides up to 25 weeks, Missouri and South Carolina provide up to 20 weeks, Montana provides up to 28
weeks, and Massachusetts provides up to 30 weeks of regular unemployment benefits. For changes in benefit duration
in 2012, see Table 1 in CRS Report R41859, Unemployment Insurance: Consequences of Changes in State
Unemployment Compensation Laws, by Katelin P. Isaacs.
17 See Employment and Training Administration, U.S. Department of Labor, UI Data Summary, 3rd Quarter 2010
(Revised), Washington , DC, 2010. U.S. State Summary Table, http://ows.doleta.gov/unemploy/content/data_stats/
datasum10/DataSum_2010_3.pdf.
18 The IUR is the ratio of UC claimants divided by individuals in UC-covered jobs. The IUR excludes several important
groups: self-employed workers, unpaid family workers, workers in certain not-for-profit organizations, and several
other, primarily seasonal, categories of workers. In addition to those unemployed workers whose last jobs were in the
excluded employment, the insured unemployed rate excludes the following: those who have exhausted their UC
benefits (even if they receive EB or EUC08 benefits); new entrants or reentrants to the labor force; disqualified workers
whose unemployment is considered to have resulted from their own actions rather than from economic conditions; and,
eligible unemployed persons who do not file for benefits.
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• Option 2: an additional 13 weeks of benefits if the state’s total unemployment
rate19 (TUR) is at least 6.5% and is at least 110% of the state’s average TUR for
the same 13 weeks in either of the previous two years; or an additional 20 weeks
of benefits if the TUR is at least 8% and is at least 110% of the state’s average
TUR for the same 13 weeks in either of the previous two years.20
Recent studies have suggested that whether an IUR or TUR trigger is used, the secular decline in
unemployment over the past several decades has resulted in the current trigger levels being
relatively difficult to attain.21 The current EB triggers have been criticized for deploying in many
states long after a recession has started, for not deploying at all in some states with high
unemployment, and for triggering off too quickly in some states. Analysts cite several reasons for
this: (1) the general long-term decline in unemployment rates has made the current triggers
irrelevant; (2) the rate and lookback provisions work against each other; and (3) amendments to
the program in the early 1980s changed the unemployment calculation in a way that made EB
activation less likely.22
Changes in the Structure and Generosity of Unemployment
Insurance
This section briefly describes the various temporary unemployment benefit programs available in
the last three recessions. Additionally, it attempts to explain how the current program and the
ARRA provisions are intertwined and how they impact the amount of available unemployment
benefits.
Temporary Federal Unemployment Insurance Programs, 1987-2010
In response to economic recessions, the federal government sometimes has augmented the regular
(UC) benefit with both the permanent Extended Benefit (EB) program and temporary expansions
(including the current Emergency Unemployment Compensation program) of unemployment
benefits. These programs extended the time (in addition to the 26 weeks of basic UC benefits) an
individual might claim benefits (up to an additional 20 weeks of EB and an additional 53 weeks
of EUC08). Some extensions took into account state economic conditions; many temporary
programs considered the state’s average unemployment rate or the state’s insured unemployment
rate, or both.23

19 The TUR is the ratio of unemployed workers to all workers (employed and unemployed) in the labor market. The
TUR is essentially a three-month averaged version of the unemployment rate published by the Bureau of Labor
Statistics and based on data from the BLS’ monthly Current Population Survey.
20 P.L. 111-312 made some temporary technical changes to certain triggers in the EB program, which allow states to
temporarily use lookback calculations based on three years of unemployment rate data if states would otherwise trigger
off or not be on a period of EB benefits. This temporary option to use three-year EB trigger lookbacks expires the week
on or before December 31, 2011.
21 See Jeffrey B. Wenger and Matthew J. Walters, “Why Triggers Fail (and What to Do About It): An Examination of
the Unemployment Insurance Extended Benefits Program,” Journal of Policy Analysis and Management, vol. 25, no. 3
(2006), pp. 553-575.
22 The Omnibus Budget Reconciliation Act of 1981 redefined the IUR to remove UC exhaustees and EB beneficiaries
from the numerator. The act also eliminated the national IUR trigger, and raised the states’ trigger to 5%.
23 CRS Report RL34340, Extending Unemployment Compensation Benefits During Recessions, by Julie M. Whittaker
and Katelin P. Isaacs.
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From 1987 through 2010, there were three temporary programs that were in effect at different
times. Table 1 on the following page provides basic information on the programs’ beginning and
ending dates, and the lowest maximum duration and highest maximum duration for potential
receipt of benefits during the programs’ existences. The 1991 Emergency Unemployment
Compensation (EUC) program provided a maximum of between 13 and 33 weeks of benefits over
its duration. The 2002 Temporary Emergency Unemployment Compensation (TEUC) program
provided up to 26 weeks of temporary benefits for its duration. The current EUC08 program
began in July 2008 and provided up to 20 weeks of benefits; over time the program has been
modified to provide up to 53 weeks of benefits. Additionally, ARRA supplemented all
unemployment benefits with an additional $25/week benefit (Federal Additional Compensation
(FAC)) from March 2009 through May 2010.
Table 1. General Description of Temporary Federal Unemployment Insurance
Programs, 1987- 2010
1990-1991

Recession
2001 Recession
2007 Recession
P.L. 102-164,
P.L. 107-147, TEUC
P.L. 110-252,

EUC Benefits
Benefits
EUC08 Benefits
Congress
August 1991
February 2002
June 2008
first enacts
extension
Program
November 1991a,b
March 2002
July 2008
becomes
active
Minimum
13 Weeks
26 Weeks
13 Weeks
weeks of
benefits
December 1993-
November 2001-
July 2008-
available
February 1994
January 2004
November 2008
Maximum
33 Weeks
26 Weeks
53 Weeks
weeks of
benefits
November 1991-
November 2001-
Beginning December
available
July 1992
January 2004
2009-Current
Authorization
February 1994
January 2004
Scheduled: End of
ended (does
December 2011
not include
phase out)
Source: Congressional Research Service (CRS). Timing of recessions from National Economic Bureau of
Research, http://www.nber.org/cycles.html.
a. H.R. 3201 was passed on August 2, 1991; President George H.W Bush signed the bill (P.L. 102-107) but did
not declare an emergency; thus, no benefits were available. Congress sent S. 1722 to the President who
vetoed it on October 1, 1991. For a statement on the reasons for the veto, see
http://www.presidency.ucsb.edu/ws/index.php?pid=20097.
b. Although P.L. 102-164 was signed into law on November 15, 1991, it was immediately superseded by two
other laws: P.L. 102-182, signed December 4, 1991, and P.L. 102-244, signed February 7,1992. P.L. 102-182
authorized benefit periods of 20 and 13 weeks depending on state economic conditions; P.L. 102-244
authorized an additional 13 weeks for each tier.
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Interaction of the American Recovery and Reinvestment Act of 2009
(ARRA; P.L. 111-5) with Unemployment Benefits
ARRA contained several provisions affecting unemployment benefits. Through the Federal
Additional Compensation (FAC) program, ARRA temporarily increased unemployment benefits
by $25 per week for all recipients of any type of unemployment insurance,24 and excluded $2,400
in UC benefits from gross income under the federal income tax for 2009. ARRA extended the
temporary EUC08 program through December 26, 2009 (with grandfathering). The EUC08
program’s expiration date has since been extended further, through December 2011.
ARRA, as amended, provides for temporary 100% federal financing of the permanently
authorized Extended Benefit (EB) program through January 4, 2012. It also allows states the
option of temporarily ignoring the programmatic “benefit year” requirement.25 Instead, states can
choose to use exhaustion of EUC08 benefits as an eligibility requirement for weeks of EB benefit
payments that fall between ARRA’s enactment and expiration of 100% federal funding of the EB
program, and as long as the state was triggered “on” for EB during the period when the individual
was receiving EUC08.26 This has the effect of allowing more individuals to be eligible for the EB
program.27 States are able to take advantage of this temporary financing structure by linking
optional ways to have an active EB program with the temporary ARRA 100% federal financing
scheme for EB.28 Furthermore, ARRA prohibited states from decreasing average weekly
benefits.29
Additionally, ARRA provides up to a total of $7 billion, total, in incentives to states to modify
their basis for computing UI benefits and for extending benefits to currently ineligible
individuals. Two-thirds of the $7 billion available to states is contingent on states first adopting an
alternative method of determining eligibility for individuals who do not qualify under the regular
method based on their wage and employment history. 30 The states are then eligible for the
remaining two-thirds of the $7 billion if they adopt at least two of the following four provisions:
1. permit former part-time workers to seek part-time work;

24 Regular state unemployment benefits averaged just over $300 during the period the FAC was offered. An additional
$25 would be approximately an 8% increase for an average benefit. Regardless of the state determined weekly benefit
amount, each worker receiving any type of unemployment benefit would have received an additional $25 each week.
25 Under permanent law, the benefit year is a one-year period during which a worker may receive benefits based on a
previous period of unemployment. In all states, the beginning date of the benefit year depends on when a worker first
files a valid claim, meaning the worker met state determined minimal earnings and employment requirements.
26 The EB program is “triggered on” when a state’s unemployment level reaches certain levels. All states must pay up
to 13 weeks of EB if the insured unemployment rate (a programmatic measure) for the previous 13 weeks is at least 5%
and is 120% of the average of the rates for the same 13-week period in each of the two previous years. There are two
other optional thresholds that states may choose.
27 All states opted for this calculation.
28 A total of 29 states opted for a temporary trigger.
29 When the FAC benefit was not extended by the amendments to ARRA in P.L. 111-205, the “non-reduction” rule for
weekly benefits was placed as an amendment to EUC08 (P.L. 110-252).
30 Information on state applications to receive the modernization payments and a summary of state actions to expand
potential entitlement to unemployment benefits can be found under the “UI Modernization Incentive Payments” on the
webpage: http://ows.doleta.gov/unemploy/laws.asp.
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2. permit voluntary separations from employment for compelling family reasons,
which must include (1) domestic violence, (2) illness or disability of an
immediate family member, and (3) the need to accompany a spouse who is
relocating for employment;
3. provide extended compensation to UC recipients in qualifying training programs
for high-demand occupations; or
4. provide dependents’ allowances to UC recipients with dependents.
How Important Were the Temporary Programs to the Unemployed?
It is difficult to assess the exact monetary impact of ARRA and the EUC08 program on the
unemployed. However, data do exist to explain what percentage of the unemployed received
unemployment benefits that were deployed on account of high unemployment (either the
temporary benefit or the EB benefit). Figure 4 displays two data series. The lower line is the
percentage of unemployed persons who received the regular (first 26 weeks) state UC benefit.
The upper line includes this group combined with the unemployed who received additional
temporary unemployment benefits (such as the EUC08 benefit) and the EB payments.
Generally, as a recession winds down the percentage of unemployed who are receiving regular
UC declines, as most of the unemployed are the long-term unemployed or new (or returning)
labor market participants who are ineligible for regular UC benefits. The percentage of the
unemployed receiving any UI benefit continues to increase as the proportion of long-term
unemployed in the pool of unemployed workers increases. The ARRA provisions and the EUC08
program temporarily expanded both the potential amount and the duration of unemployment
benefits, exceeding the generosity of any previous congressional intervention. This can be seen in
the increased percentage of the unemployed receiving UI benefits in 2009 and 2010—almost two-
thirds of all unemployed persons were receiving unemployment benefits (the highest level since
1976).

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Figure 4. Percent of Unemployed Receiving Unemployment Benefits
1987-2010
% Receiving Benefits
70
UI Receipt (UC, EB, EUC08, TEUC, EUC) /
Total Unemployed
UC Only / Total Unemployed
60
50
40
30
20
/91
/01
3
-
Recessionary Period
11
6/09
90
7/
01 -
/07 -
3/
10
12
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Figure created by the Congressional Research Service (CRS) from U.S. Department of Labor data.
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Figure 5 depicts the average percentage of workers who received some kind of additional benefit
beyond regular UC payments. In 2010, the percentage of unemployed who received additional
benefits beyond regular UC was at least 17 percentage points higher than any other year in the
previous two post-recession periods.
Figure 5. Percentage of Unemployed Receiving Temporary (EUC, TEUC, or EUC08)
Benefits or Extended Benefits
1987 - 2010
Percent
40
35
35
EB+EUC+TEUC+EUC08
30
91
/01
3/
-
11
6/09
90
Recessionary Period
7/
01 -
/07 -
3/
12
25
21
20
18
16
15
9
9
10
5
5
2
1
1
2
2
0
0
0
0
0
0
0
0
0
0
0
0
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Figure created by the Congressional Research Service (CRS) from U.S. Department of Labor data.
Antipoverty Effects of Unemployment Insurance
The role unemployment insurance plays in poverty among the unemployed is well documented. A
Congressional Budget Office (CBO) study found that the UI benefits reduced the 2009 poverty
rate by 1.1 percentage points to 14.3 percent.31 Recent research by Vroman examined UI benefits
and all other types of federal transfer payments from 2001 through 2008 and found that while the
overall effect on the poverty rate was small the impact increases as the duration of unemployment
increases.32 In a brief analysis of the impact of the 2009 American Recovery and Reinvestment

31 Gregory Acs and Molly Dahl, Unemployment Insurance Benefits and Family Income of the Unemployed,
Congressional Budget Office, Washington, DC, November 17, 2010, http://www.cbo.gov/ftpdocs/119xx/doc11960/11-
17-UnemploymentInsurance.pdf.
32 Wayne Vroman, The Great Recession, Unemployment Insurance and Poverty, Urban Institute, Paper Prepared for
the Conference on Reducing Poverty and Economic Distress after ARRA, Washington, DC, January 15, 2010,
(continued...)
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Act (P.L. 111-5), Sherman estimated that 1.3 million people were kept out of poverty through
additional temporary UI benefits.33
This report contributes to this recent research on the antipoverty effects of unemployment
insurance in several ways. Its period of analysis is longer and allows comparisons across the three
most recent recessions. The report includes estimates of the effects on the poverty rate for the
unemployed, those receiving UI, and for families that report at least one family member receiving
UI. It also estimates how much of the total reported UI benefits went directly to decreasing family
poverty levels.
Antipoverty Effects of UI on All Persons
This section examines the antipoverty effects of UI benefits primarily for all persons who
received UI benefits (not just those who had limited labor force attachment due to economic
reasons). Because the U.S. poverty measure is based on the income of all co-resident related
family members, UI receipt affects not only the poverty status of the person receiving the benefit,
but the poverty status of all related family members, as well. In 2010, while an estimated 12.4
million people reported UI receipt during the year, 34 an additional 19.4 million family members
lived with the 12.4 million receiving the benefit. Consequently, UI receipt in 2010 affected the
income status of some 31.9 million persons.
Figure 6 shows the effect of UI benefit receipt on the overall poverty rate. The figure shows the
percent of persons in poverty—both before counting UI benefits as income and after—using
Census Bureau poverty income thresholds.35 The figure shows, for example, that in 2010, under
the pre-UI benefit poverty measure, an estimated 16.2% of the population would have been
counted as poor; the receipt of UI benefits reduced the poverty rate by 1.1 percentage points, to
15.1%, the “official” U.S. poverty rate. The antipoverty effect of UI benefits in 2010 was on par
with that of a year earlier, when UI benefits accounted for a 1.1 percentage point reduction in
poverty, from 15.4% to 14.3%. Note that 1993 marked a previous peak in the “official” poverty
rate, also at 15.1%, but UI benefits contributed to only a 0.5 percentage point reduction in poverty
(i.e., from 16.6% to 15.1%) in that year. By this measure, the poverty reducing effect of UI in
both 2009 and 2010 was about twice that of 1993.

(...continued)
http://www.urban.org/uploadedpdf/412072_great_recession.pdf.
33 Arloc Sherman, Despite Deep Recession and High Unemployment, Government Efforts, -Including the Recovery
Act- Prevented Poverty from Rising in 2009, New Census Data Show, Center on Budget and Policy Priorities,
Washington, DC, January 5, 2011, http://www.cbpp.org/cms/index.cfm?fa=view&id=3361.
34 An estimated 10.7 million (82.6%) of those persons had limited or no attachment to a job during the year, due to
economic reasons; i.e., were unemployed, worked fewer hours than desired, or were “discouraged” potential workers.
(See Appendix B for more information UI benefit receipt by labor force status on the CPS/ASEC.)
35 Census Bureau poverty thresholds vary by family size and composition. In 2009, for example, the average poverty
threshold for single persons living with no related family members was $10,956; for two related persons, $13,991, for
three related persons, $17,098, and for four related persons, $21,954.
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Figure 6. Pre- and Post-UI Benefit Poverty Rates of Persons, 1987-2010
Percent of persons who are poor before and after counting UI benefits
Percent
18%
Pre UI Poverty Rate
16.2%
15.6%
Post UI Poverty Rate
16%
15.4%
15.1%
14.9%
14.6%
15.1%
14.1% 14.0%
15.1%
13.7%
13.8%
14%
14.5%
13.5%
13.5%
13.2%
14.5%
13.0%
14.2%
14.3%
12.9%
12.9% 13.0% 12.8%
13.8% 13.7%
12.5%
12.5% 12.6%
13.4%
13.5%
13.3%
12.0%
13.0%
11.9%
13.2%
12.8%
12.7%
11.5%
12.7%
12%
12.5%
12.6%
12.1%
12.3% 12.5%
11.8%
11.7%
11.3%
10%
8%
6%
4%
91
3/
/01
09
-
Recessionary Period
11
6/
-
-
7/90
/07
2%
3/01
12
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.

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Figure 7 shows the number of persons (in millions) lifted above poverty by the receipt of UI
benefits. The figure shows that in both 2009 and 2010, well over 3 million people (3.3 and 3.2
million, respectively) were lifted above the official poverty line as the result of UI benefit receipt.
UI benefits lifted nearly a million children (956,000) above the poverty line in 2009, and a
somewhat lesser number (861,000) in 2010. In contrast, in 1992, UI lifted about 1.5 million
persons out of poverty, of whom nearly a half million (479,000) were children.
Figure 7. Number of Persons Lifted Above Poverty as a Result of UI Benefit Receipt,
1987-2010
Millions of persons
Millions
3.5
3.322
3.210
3.0
0.956 0.861
2.5
Children (Under 18)
Adults
2.0
1.468
1.5
1.257
1.208
0.479
1.177
2.366 2.350
1.006
0.394
1.0
0.406 0.905
0.424
0.905
0.345
0.684
0.716
0.726
0.668
0.324
0.700 0.656
0.292
0.633 0.601 0.572 0.602 0.563
0.573
0.240 0.518
0.261
0.481 0.247
0.287
0.257 0.204
0.488
0.5
0.989
0.229 0.218 0.217 0.227 0.208
0.205
0.207 0.171
0.803
0.864
0.753
0.164
0.661
0.581
0.613
0.445
0.420
0.429 0.404
0.465
0.443 0.452
0.311 0.310
0.382 0.354 0.374 0.356
0.368 0.324
0.0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
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Antipoverty Effect of UI on Persons in Families Receiving
UI Benefits
Figure 8 shows pre- and post-UI poverty rates among persons in which they or another family
member received UI benefits during the year. The figure is similar to Figure 6, except that figure
showed the effect of UI benefit receipt on the overall U.S. poverty rate, whereas Figure 8 is only
for persons in families that received UI benefits. The figure shows, for example, that in 2010,
among individuals and families in which someone received UI benefits during the year, well over
one-fifth of persons (22.9%) would have been considered poor absent the UI benefits they
received; UI benefits cut their incidence of poverty in half, to about one in eight persons (12.8%).
Figure 8. Pre- and Post-UI Benefit Poverty Rates of Persons in Families that
Received UI Benefits, 1987-2010
Percent of persons who are poor before and after counting UI benefits
Percent
25%
22.9%
21.0%
20%
17.8%
Pre-UI poverty rate
17.0%
16.5%
15.6%
15.0%
15%
14.1% 14.2% 14.2%
14.1%
14.3%
14.3% 14.2%
13.4%
13.1%
13.4%
12.9%
13.0%
12.8%
12.4% 12.0%
12.0%
13.8%
11.6%
11.8% 11.3%
10.9%
10.9%
10.4% 10.7% 10.6%
11.9%
10.5%
9.9%
10.0% 9.8%
9.5%
9.6%
10%
9.1% 9.1%
8.9%
9.1% 9.3% 9.5%
8.4%
8.7%
8.1%
Post-UI poverty rate
5%
91
/01
09
3/
-
Recessionary Period
11
6/
-
07 -
7/90
01
3/
12/
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (ASEC), 1988 to 2011.
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Figure 9 shows calculations derived from the data presented in Figure 6 and Figure 8. Figure 9
shows that UI benefits in 2009 and 2010 reduced the overall poverty rate by 7.1% and 6.5%,
respectively—almost twice the next largest reduction of poverty attributable to UI benefits in
1992, when UI cut the overall poverty rate by 3.8%. Among persons in families and unrelated
individuals that received UI benefits, those benefits cut their poverty rate nearly in half (48%) in
2009, and by 44% in 2010, compared to about two-fifths (38.1%) in 2002, and about one-third in
1992 (32.5%).
Figure 9. Percent Reduction in the Poverty Rate as a Result of UI Benefit Receipt,
Overall Poverty Rate and Poverty Rate for Persons in Families that Received
UI Benefits, 1987 - 2010
Percent
0%
-2.1% -1.6% -1.5% -1.9%
-1.9% -1.7% -1.5% -1.3%
-2.7%
-2.3% -1.9% -1.7% -1.7% -1.6% -1.8% -1.8% -2.2%
-2.2%
-3.0%
-5%
-3.8%
-3.3% -3.4%
-6.5%
-7.1%
-10%
Percent reduction in overall poverty rate
-15%
91
Percent reduction in poverty among persons in
/01
3/
09
-
11
families receiving UI
-
6/
-
-20%
7/90
3/01
/07
12
-23.9%
-25%
-27.0%
-24.9%-25.7%
-28.5%
-26.6%
-26.2%
-26.9%
-30.0%
-27.6%
-27.7%
-31.5%
-30% -29.4%
-32.2%
-30.5%
-30.0%
-31.1%
-32.5%
-31.8%
-32.6%
-35%
-36.0%
-38.1%
-40%
-44.0%
Recessionary Period
-45%
-48.0%
-50%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.

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Aggregate UI Dollars Going Towards Reducing Poverty
Figure 10 shows that aggregate UI benefits reported on the CPS in 2009 and 2010 ($99.1 billion
and $99.5 billion, respectively) were over twice those reported in 1992 ($42.4 billion in 2010
constant dollars) and in 2002 ($45.2 billion in 2010 constant dollars). In 2009, an estimated $17.9
billion in UI benefits went towards reducing poverty36 (18.1% of all UI dollars), and in 2010,
$19.4 billion (20.3% of all UI dollars). In 1992, about $7.1 billion (16.7% of all UI dollars), and
in 2003, an estimated $5.9 billion (13.6% of all UI dollars) went towards poverty reduction. It
should be noted that actual benefits paid out exceed the amount captured by the CPS/ASEC, as
income amounts from virtually all income sources reported on the survey tend to fall short of
administrative or other benchmarks (see Appendix C for further discussion). Figure 11 uses
calculations from the data presented in Figure 10 to show the proportion of UI dollars that
reduced poverty to all UI dollars.

36 Among families considered poor before counting any UI benefits they received, UI dollars filling the “poverty gap”
represent the aggregate amount of UI benefits going towards filling the shortfall in families’ incomes from their
respective poverty income thresholds.

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Antipoverty Effects of Unemployment Insurance

Figure 10. UI Benefits: Aggregate Dollars and Dollars Reducing Poverty, 1987-2010
(In billions of 2010 constant dollars)
Billions
$99.1
$100
$95.5
$90
$80
Non poverty gap filling UI dollars
$70
UI dollars fil ing poverty gap
$60
$81.2 $76.1
$50
$45.2
$42.4
$43.0
$38.0
$38.3
$40
$34.0
$29.5
$29.5
$28.5
$30
$26.3
$23.1
$24.0
$24.1
$35.4
$39.7
$21.0
$37.1
$21.8 $22.6
$19.7
$20.7
$31.8
$18.9 $18.3
$33.8
$17.2 $17.8
$20
$29.6
$26.3
$26.8
$25.2
$23.4
$20.7
$21.5
$21.5
$17.5
$18.6 $18.5
$19.3 $20.2
$10
$15.4 $16.2
$16.7 $16.1
$17.9 $19.4
$7.1
$6.2
$5.4
$5.9
$2.2
$1.8
$1.6
$2.3
$4.4
$3.2
$2.8
$2.4
$2.4
$2.2
$2.2
$2.2
$2.7
$3.3
$2.6
$2.6
$2.4
$4.5
$0
1987 1988
1989 1990
1991 1992
1993 1994
1995 1996
1997 1998
1999 2000
2001 2002
2003 2004
2005 2006
2007 2008
2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
Note: Dol ars are estimates reported on the CPS/ASEC, which under-represent actual benefits paid to the
unemployed. Among families considered poor before counting any UI benefits they received UI dollars filling the
“poverty gap” represent the aggregate amount of UI benefits going towards filling the shortfall in families’
incomes from their respective poverty income thresholds.
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Antipoverty Effects of Unemployment Insurance

Figure 11. Share of Aggregate UI Benefits Going Toward Reducing Poverty,
1987-2010
Percent
25%
20.3%
20%
18.1%
16.7% 16.4%
15%
13.6%
12.8%
11.9%
12.0%
11.7%
11.4%
11.5%
11.4%
10.9%
10.8%
10.7%
11.8%
10.3%
10.5%
10.2%
10.5%
10%
9.2%
10.1%
10.9%
9.2%
5%
91
01
3/
09
11/
6/
90 -
Recessionary Period
7/
01 -
07 -
3/
12/
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
Note: Based on UI benefits reported on the CPS/ASEC. Aggregate UI benefits reported on the survey under-
represent actual dollars paid out as UI claims under state Unemployment Insurance trust funds. Among families
considered poor before counting any UI benefits they received, UI dol ars filling the “poverty gap” represent the
aggregate amount of UI benefits going toward filling the shortfall in families’ incomes from their respective
poverty income thresholds.
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Antipoverty Effects of Unemployment Insurance

Antipoverty Effect of UI Benefits Among Unemployed Individuals
Figure 12 compares poverty rates among unemployed persons by whether they received UI
benefits during the year, or not. (The figure differs from Figure 8, shown previously, which was
for all persons in families that received UI benefits). For those that received UI benefits, both
their pre-UI poverty rates and post-UI poverty rates are shown. The figure shows, for example,
that persons who received UI benefits had lower poverty rates, before counting any UI benefits
they received, than their counterparts who did not receive UI benefits. In 2009 and 2010, among
persons who were unemployed and reported no UI benefit receipt (top line), nearly three in ten
(29.1% and 29.7%, respectively) were poor. In contrast, in 2010, about over one quarter (27.5%)
of unemployed persons who reported receiving UI benefits were poor, prior to counting any UI
benefits they received (middle line) (up from 24.3% in 2009). In most years, other than those
immediately around recessionary periods, pre-UI poverty rates of persons who received UI
benefits (middle line) ranged from 40% to 50% below those of their unemployed counterparts
who did not receive UI benefits (top line). Immediately after recessionary periods the differences
in poverty rates before UI receipt is calculated narrows. For example, in 1993, the pre-UI poverty
rate of persons receiving UI benefits was 36% below that of persons not receiving UI; in 2003,
26% below; in 2009, 16% below, and in 2010, just 7% below.
Figure 12. Pre-Post UI Poverty Rates Among Unemployed Persons Who
Received UI Benefits and Those Who Did Not, 1987-2010
Percent
35%
Did not receive UI - Poverty rate
Received UI - Pre-UI poverty rate
Received UI - Post-UI poverty rate
29.7%
30%
28.6%
29.1%
27.2%
27.5%
26.5%
26.5%
26.9%
25.8%
26.0% 25.9%
25.6% 25.7% 25.9%
24.8% 25.0%
24.6%
24.8%
24.7%
25%
23.6% 23.6%
23.6% 23.8%
23.1%
24.3%
22.1%
20%
18.9%
18.3% 18.3%
15.0%
15.4%
14.9% 14.7% 14.8% 15.1%
15.0%
14.4%
15% 13.6%
13.6%
13.4% 15.3%
12.6%
13.0% 12.9% 13.3% 12.4%
12.5%
11.4% 11.8%
10.8% 11.2%
9.8% 9.8% 10.1% 9.8%
10.1%
9.1%
9.5%
9.3%
9.1%
9.3%
10.5%
10%
8.3%
8.7%
8.0% 8.0%
8.4%
8.2%
7.9%
8.1%
7.4%
7.3%
5%
91
09
3/
/01
-
6/
Recessionary Period
11
-
7/90
/07
3/01 -
12
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
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UI benefits dramatically reduced the incidence of poverty among the population who receive
them. In 2010, for example, over one quarter (27.5%) of unemployed people who received UI
benefits would have been considered poor prior to counting the UI benefits they received (middle
line); after counting UI benefits, their poverty rate was cut by well over half, to 12.5% (bottom
line). In contrast, in the two previous recessions, UI benefits to the unemployed reduced their
incidence of poverty from a pre-UI poverty rate of 18.9% to a post-UI poverty rate of 10.1% in
2003, and from 18.3% to 11.2% in 1993. Based on this, and the other evidence presented in this
analysis, UI benefits in the most recent recession appeared to have played a significantly greater
role in reducing poverty than in either of the two previous recessions.
Figure 13 depicts the share of unemployed persons who had no earnings during the year, by
whether the individual received UI benefits during the year or not. The figure shows, for example,
that in 2007, among unemployed during the year who received UI benefits, just over 1-in-20
persons (5.6%) had no earnings during the year. In comparison, among those unemployed who
reported no UI receipt, over 1-in-5, 21.7%, had no earnings in 2007.
The share of unemployed UI recipients who had no earnings during the year increased during the
most recent recession: from 1-in-10 (10.1%) in 2008, to over 1-in-5 (20.7%) in 2009, and to over
1-in-4 (25.7%) in 2010. This trend corresponds to an increase in the median duration of
unemployment among unemployed workers from 2007 to 2010, shown earlier in Figure 2. This
pattern also is apparent in the administrative data shown earlier in Figure 4 which showed an
increased reliance among the unemployed on Extended Benefits (EB) and Emergency
Unemployment Compensation (EUC08), relative to regular Unemployment Compensation (UC)
benefits.
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Figure 13. Share of Unemployed Persons Who Had No Earnings in the Year,
by UI Receipt, 1987-2010
Percent
35%
32.7%
91
01
09
3/
1/
1
6/
Recessionary Period
-
30.2%
90 -
01
/07 -
30%
7/
3/
12
Unemployed, Did Not Receive UI,
No Earnings During the Year
25.7%
24.9%
25.1% 24.5% 24.4%
25%
22.9%
23.3%
23.0%
22.2%
21.7%
20.7%
20.7%
20.1%
20.1%
20.4%
19.6%
19.5%
20% 18.1%
18.3%
18.2%
17.6%
17.5%
16.7%
15.5%
15%
Unemployed, Received UI,
No Earnings During the Year
9.7%
10.1%
9.4%
9.8% 9.7%
10%
7.3%
7.5%
5.7%
6.1%
5.4% 5.3%
5.6%
4.4% 4.3% 4.3%
4.7%
4.1%
5%
3.4% 3.3%
3.6%
2.9%
2.4%
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
The increase in pre-UI poverty rates of unemployed UI recipients, the increased proportion of the
unemployed receiving EB or EUC08 benefits, and the increased likelihood that unemployed UI
recipients reported no earnings in the past year, suggest that the convergence of the pre-UI
poverty rates (shown earlier in Figure 12) is a result of the increased duration of unemployment.
In terms of the most recent recession and its aftermath, UI benefits (UC, EB, and EUC08)
continue to appear to have a large poverty-reducing effect among unemployed workers who
receive them. In particular, given the extended length of unemployment among jobless workers,
the additional weeks of UI benefits beyond the regular UC program’s 26-week limit appear to
have had an especially important effect in poverty reduction.
Summary
Our analysis shows that UI benefits appear to significantly reduce the incidence of poverty among
the population who receives them. The UI benefits’ poverty reduction effects appear to be
especially important during and immediately after recessions. Our analysis also finds that there
was a markedly higher impact on poverty in 2009 and 2010 than in the previous two recessionary
periods. The estimated antipoverty effects of UI benefits in 2009 and 2010 were about twice that
of two previous peak years of unemployment, in 1993 and 2003. This may be attributable to the
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temporary provisions of ARRA and the EUC08 program which increased both benefit levels and
benefit duration.
• In 2010, well over one-quarter (27.5%) of unemployed people who received UI
benefits would have been considered poor prior to counting the UI benefits they
received; after counting UI benefits, their poverty rate was cut by well over half,
to 12.5%.
• Because the U.S. poverty measure is based on the income of all co-resident
related family members, UI receipt affects not only the poverty status of the
person receiving the benefit, but the poverty status of all related family members,
as well. In 2010, while an estimated 12.4 million people reported UI receipt
during the year, an additional 19.4 million family members lived with the 12.4
million receiving the benefit. Consequently, UI receipt in 2010 affected the
income status of some 31.9 million persons.
• The poverty rate for persons in families who received unemployment benefits in
both 2009 and 2010 was approximately half of what it would have been without
those unemployment benefits.
• In 2010, UI benefits lifted an estimated 3.2 million people out of poverty, of
which well over one quarter (26.8%, 861,000) were children living with a family
member who received UI benefits.
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Antipoverty Effects of Unemployment Insurance

Appendix A. Legislative Details of the Emergency
Unemployment Compensation (EUC08) Program
On June 30, 2008, President George W. Bush signed the Supplemental Appropriations Act of
2008 (P.L. 110-252) into law. Title IV of this act created a new temporary unemployment
insurance program, the Emergency Unemployment Compensation (EUC08) program. This was
the eighth time Congress had created a federal temporary program that has extended
unemployment compensation during an economic slowdown. The authorization for this program
continues until December 31, 2011.
Currently this temporary unemployment insurance program provides up to a total of 53 additional
weeks of UI benefits. It provides up to 20 additional weeks of unemployment benefits to most
workers who have exhausted their rights to regular UC benefits. A second tier of benefits provides
up to an additional 14 weeks of benefits (for a total of 34 weeks of EUC08 benefits available for
all unemployed workers regardless of state unemployment rates). A third tier is available in states
with a total unemployment rate of at least 6% and provides up to an additional 13 weeks of
EUC08 benefits (for a total of 47 weeks of EUC08 benefits). A fourth tier is available in states
with a total unemployment rate of at least 8.5% and provides up to an additional six weeks of
EUC08 benefits (for a total of 53 weeks of EUC08 benefits).37
The EUC08 program has been amended by P.L. 110-449, P.L. 111-5, P.L. 111-92, P.L. 111-118,
P.L. 111-144, P.L. 111-157, P.L. 111-205, and P.L. 111-312. In July 2008, the program began with
a flat 20 weeks of entitlement. In November 2008, P.L. 110-449 created an additional 13 week
entitlement for workers in states with high unemployment for a total of 33 weeks of benefits
available. This entitlement was expanded by an additional 20 weeks (up to 14 additional weeks in
all states and 6 additional weeks in very high unemployment states) resulting in a potential of 53
weeks as required by P.L. 111-92 in November 2009.

37 The total unemployment rate is a three-month seasonally adjusted average of the state’s monthly unemployment rate.
For a detailed legislative history of the EUC08 program see CRS Report RL34340, Extending Unemployment
Compensation Benefits During Recessions, by Julie M. Whittaker and Katelin P. Isaacs.
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Appendix B. Trends in Labor Force Status and UI
Receipt Over Time
This appendix presents an analysis of trends in labor force status and UI receipt, as reported in the
CPS/ASEC. The analysis is based on labor force status in the year preceding the CPS/ASEC
survey, based on survey respondents’ accounts.
The appendix provides contextual reference of different measures of labor “underutilization,”
including monthly and annual monthly averages of unemployment compared to estimates for
persons unemployed at anytime during the year (the definition of unemployed used in the report’s
CPS/ASEC analysis). It also examines and more expansive definitions of labor utilization, which
in addition to unemployed (persons without a job who looked for work) includes involuntary part-
time workers and discouraged workers (those who did not search for work believing suitable
work is not available). The appendix examines UI receipt reported on the CPS/ASEC among
persons of the above, and other, labor force statuses.
The CPS/ASEC collects information on over 50 sources of income, and up to 27 individual
income values—UI benefits are among the many income sources and amounts captured by the
survey, since 1988. CPS/ASEC survey respondents report their yearly income from each specific
source. See Appendix C for a comparison of CPS/ASEC estimates of UI receipt and amounts
with administrative benchmarks of UI claims and benefit amounts.
Unemployed Persons and Those with Limited Labor Force
Attachment Relating to Economic Conditions Who Reported UI
Receipt
Figure B-1 and Figure B-2 show persons who reported UI benefit receipt and their labor force
status in 2010, based on CRS analysis of the 2011 CPS/ASEC. The analysis primarily focuses on
several groups of persons who are unemployed or who have limited labor force attachment over
the year that may be associated with economic conditions. These groups are represented in
Figure B-1. Among these groups are those who most likely might qualify for UI benefits. The
groups (with the percent of each group represented among persons who reported UI receipt in
2010) include
• “Unemployed” (70.7%): persons who reported having worked less than full year
and looked for work during the year or were on layoff;
• “Involuntary part-time workers” (4.0%): persons who worked all year but
reported having worked less than full time (35 or more hours per week) due to
slack work or because they could only find part-time work;
• “Part-year discouraged workers” (2.2%): persons who worked only part year,
but did not search for work because they believed no work was available.
In addition to the groups above, who were all in the labor force during the year by virtue of
having had a job and/or looking for work, the analysis includes
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• “Discouraged potential workers, outside the labor force” (3.4%): persons who
were out of the labor force for the entire year and reported that they did not look
for work because they believed no work was available.
The four groups delineated above represent those respondents on the CPS who might most
reasonably be expected to be among the population potentially qualified to receive UI benefits.
They represent the majority of persons, 10.0 million (80.3%) of 12.4 million who reported
receiving UI benefits in 2010, and constitute the major groups that appear to have had limited
work force/labor force attachment associated with economic conditions.38
Other Labor Force Statuses of Persons Who Reported UI Receipt
Included among persons on the CPS who report UI receipt, not all appear to have limited labor
force attachment that might seem to be directly associated with economic conditions. These
groups are depicted in Figure B-2. Reported receipt of UI among these cases is somewhat
incongruent with their reported labor force status during the year. These groups that reported UI
receipt include
• “Full-time, Full-Year Workers” (5.9%): persons who reported having worked
full-time (35 or more hours per week), full-year (50 to 52 weeks) and did not
look for work during the year;
• “Out of the labor force (OLF), full or part-year, for personal reasons” (11.8%):
persons who were out of the labor force for part or the entire year (i.e., did not
look for work during the period they were without work) and reported that the
primary reason they were not working was because they were ill or disabled,
taking care of home or family, going to school, or retired;
• “Voluntary part-time workers” (1.5%): persons who worked part time for the
entire year, because they wanted part time work ;
• “Persons in the armed forces living off base” (negligible, less than 0.1%).
The somewhat anomalous report of UI among the above groups may be due to misreporting of UI
benefit receipt itself, or imprecise reporting of their labor force attachment over the course of the
year.39 For example, in the latter case, a respondent may have been unemployed during part of the
year, and later in the year enrolled in school, or decided to retire. Individuals who were enrolled
in school may be eligible for unemployment benefits while attending Workforce Investment Act
(WIA)-approved training programs.


38For more information on why alternative measures of unemployment statistics may be used see U.S. Department of
Labor, Bureau of Labor Statistics, The Unemployment Rate and Beyond: Alternative Measures, Issues in Labor
Statistics, Summary 08-06, Washington, DC, June 2008, http://www.bls.gov/opub/ils/pdf/opbils67.pdf.
39 Furthermore, there are several small programs that allow workers to receive unemployment benefits while working
close to full-time hours. (See CRS Report R40689, Compensated Work Sharing Arrangements (Short-Time
Compensation) as an Alternative to Layoffs, by Alison M. Shelton.) Under some state UI programs it is possible for the
unemployed to be in training/educational pursuits as long as certain criteria are met.
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Figure B-1. Persons Who Reported UI Benefit Receipt, by
Figure B-2. Persons Who Reported UI Benefit Receipt, by
Labor Force Status: 2010
Labor Force Status: 2010
Unemployed, Underutilized, and Discouraged Workers Due to Economic
Other Labor Force Statuses of Persons Reporting UI Receipt
Conditions (9.996 million persons)
(2.451 million persons)



Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement (CPS/ASEC), 2011.
Note: * Persons Outside the Labor Force (OLF).

CRS-31

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Antipoverty Effects of Unemployment Insurance

Comparing the Share of Unemployed and Underutilized Workers
at Any Time During the Year to Monthly and Annual Average
Unemployment Statistics
Figure B-3 compares annual measures of unemployment and labor underutilization derived from
CRS analysis of CPS/ASEC data with the monthly unemployment rate, and annual average
monthly employment rate (as published by the BLS, based on the monthly CPS, presented at the
beginning of this report in Figure 1).
It is important to note that CRS CPS/ASEC unemployment and labor underutilization rate
estimates are based on survey respondents’ accounting of their labor force status over an entire
year. By this measure, a respondent would be considered unemployed if they were unemployed at
any time during the year. The odds are greater that a person will be unemployed at any time
during the year, than at a particular point in time during the year. Consequently, the CRS
CPS/ASEC unemployment and labor underutilization measures are both higher than
corresponding BLS monthly and annual average monthly measures. The BLS monthly
unemployment rate peaked at 10.1% in October 2009; whereas, the annual average monthly rate
for 2009 was 9.3%. In contrast, the CRS CPS/ASEC unemployment rate, measuring persons who
were ever unemployed during the year as share of the labor force, was 13.0%—a full 3.3
percentage points above the annual average monthly rate. Similarly, the CRS CPS/ASEC
underutilized worker rate was 19.5% in 2009; this compares to an annual average monthly rate
for the BLS U-6 alternative unemployment measure of 16.3% for 2009 (compare with Figure 3,
shown earlier).
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Figure B-3. Share of Unemployed and Underutilized Workers at Any Time During
the Year Compared to Monthly and Annual Average Unemployment
January 1987 to September 2011
Percent
19.5
20
18.9
19
Unem ployed at any time
17.4 17.6
18
during the year plus under
utilized w orkers***
16.6
16.7
17
16.3
15.7
15.6
16
14.9 15.0
14.9
15
14.1
13.5
14
13.2
13.4
12.9 12.9
12.8
13.0
12.7
12.6
12.7
13
12.2
12.3
12.0
12.1 12.1
11.8
Unem ployed at any time
11.4
12
11.1
during the year**
10.9 11.0
10.8
11.0
10.7
11
10.0
9.6
9.3
9.4
10
9.1
9.3
9.3
8.4
8.5
9
8.1
8.3
Monthly and annual
7.8
8.0
average unemployment
7.5
8
7.3
rate (▲)*
6.9
6.9
7
6.2
6.1
5.8
6.0
5.8
5.5
5.6
5.6
5.5
6
5.3
5.4
4.9
5.1
4.5
4.7
4.6
4.6
5
4.2
4.0
4
3
91
01
09
Recessionary Period
6/
2
3/
11/
o
o
o
t
1
90 t
01 t
/07
7/
3/
12
0
87
-88
90
91
92
93
97
98
99
00
04
05
06
10
11
n-89
-94
n-95
n-96
n-01
n-02
n-03
-07
n-08
n-09
Jan-
Jan
Ja
Jan-
Jan-
Jan-
Jan-
Jan
Ja
Ja
Jan-
Jan-
Jan-
Jan-
Ja
Ja
Ja
Jan-
Jan-
Jan-
Jan
Ja
Ja
Jan-
Jan-
Date

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual and Social and Economic Supplement (CPS/ASEC). 1988 to 2011; and U.S. Bureau of Labor Statistics
(BLS) monthly unemployment rates, available at http://data.bls.gov/cgi-bin/surveymost?bls.
Notes:
* Monthly and annual average of monthly unemployment rates from U.S. Bureau of Labor Statistics (BLS)
monthly unemployment rates, available at http://data.bls.gov/cgi-bin/surveymost?bls.
** CRS estimates from the CPS/ASEC of persons who where unemployed at any time during the year, as a share
of labor force participants during the year plus “discouraged potential workers” outside the labor force.
*** CRS estimates from the CPS/ASEC of persons who where unemployed at any time during the year plus
underutilized workers (part-year discouraged workers, involuntary part-time workers, and discouraged potential workers,
outside the labor force) as a share of labor force participants during the year plus “discouraged potential workers”
outside the labor force.
Trends in Unemployment and Alternate Measures of Labor
Underutilization
Figure B-4 provides estimates of the number of persons whose job attachment may have been
limited due to economic conditions. The labor force definition used here includes all civilians age
15 and older who held a job at any time during the year, or looked for work. In addition, it
includes persons who were outside the labor force (OLF) for the entire year, who indicated that
they did not search for work because they believed no work was available—a group categorized
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as “discouraged potential workers.” This group is generally not included in the standard labor
force definition. For brevity, the term labor force is used throughout the analysis, but it should be
kept in mind that it includes “discouraged potential workers (DPW).”
As shown in Figure B-4, an estimated 25.3 million persons were unemployed at some time
during 2010. Another 8.4 million were involuntary part-time workers, who desired more hours of
work. An additional 1.8 million persons worked only part year, but did not search for work
because they believed no work was available. Finally, another 2.0 million discouraged potential
workers were outside the labor force for the entire year, indicating that they did not search for
work because they believed no work was available. In total, in 2010, an estimated 37.5 million
persons had limited or no labor force attachment during the year that may have been associated
with economic conditions. This compares to an estimated 29.4 million such persons in 1993, and
24.2 million in 2003, which marked previous peaks of slack employment in the U.S. economy.
Figure B-4. Expanded Definitions of Unemployment and Labor Underutilization,
1987-2010
Numbers in millions
Millions
Total,
2010:
40
37.5 m il.
2.0 m il.
1.8 m il.
35
8.4 m il.
30
Discouraged potential
w orkers, OLF
25
25.3 m il.
Part-year w orker
discouraged w orkers
20
Involuntary
part-tim e w orkers
15
10
Unem ployed
5
0
87
88
91
92
95
96
99
00
03
04
07
08
19
19
1989 1990 19
19
1993 1994 19
19
1997 1998 19
20
2001 2002 20
20
2005 2006 20
20
2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
Figure B-5 shows that in 2010, an estimated 12.7% of the labor force was unemployed at some
time during the year, which was similar to the earlier peak in 1991 and 1992 (12.9%).40 The 1990-
1991 recession contributed to the share of the labor force experiencing some period of

40 The differences between the two peaks are not statistically significant.
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unemployment rising from a pre-recession low of 10.9% in 1988, to a high of 12.9% in 1991 and
1992 (a 3 percentage point increase). In contrast, under the most recent recession, the share of the
labor force experiencing some period of unemployment during the year rose from a pre-recession
low of 8% in 2006, to 12.7% in 2010 (a 4.7 percentage point increase).
The figure shows that in 2010 nearly one-fifth of the labor force (18.9%) had limited labor force
attachment for economic reasons, up from a pre-recession low of 12.1% in 2006 (a 6.8 percentage
point increase). In addition to the unemployed, involuntary part-time workers accounted for 4.2%
of the labor force, and part-year discouraged workers and discouraged potential workers each
accounted for 1.0% of the labor force. The top line in Figure B-5 presents the sum of each of
these groups to create a total unemployment rate using this expanded definition of individuals
who were unemployed and is the same as the top line in Figure B-3. The share of the labor force
under this expanded definition of unemployed in 2010 was 1.3 percentage points above the
previous high of 17.6% in 1992.
Figure B-5. An Expanded Definition of Unemployed and Underutilized Workers,
1987-2010
Percent of unemployed workers, workers with involuntary part-time or part-year status, and discouraged
potential workers who are outside the labor force (OLF)
Percent
20%
18.9%
Total Unem ployed,
17.6%
Underutilzed, and
18%
Discouraged Workers
15.7%
16%
15.0%
13.5%
14%
12.9%12.9%
12.7%
Unem ployed
12%
11.8%
12.1%
11.0%
10.9%
10%
10.7%
9.4%
8%
8.0%
91
7.3%
09
6/
6%
3/
-
01
07 -
7/90
Recessionary Period
11/
12/
4.2%
01 -
Involuntary
4%
3/
part-time workers
2%
Part-year discouraged
1.0% workers
Discouraged potential
workers, OLF
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
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Antipoverty Effects of Unemployment Insurance

Unemployment Insurance Receipt Among Persons Who Were
Unemployed or Who Had Limited or No Labor Force Attachment
for Economic Reasons
Figure B-6 shows the share of persons who reported receiving UI benefits, by their labor force
status during the year. The figure includes only persons who had limited or no labor force
attachment during the year due to economic reasons or who met the CPS definition of
unemployed. In 2010, these groups accounted for 10.0 million persons, or four-fifths (80.3%) of
the 12.4 million who reported receiving UI benefits.
The figure shows that 34.8% of persons who were unemployed received UI benefits in 2010,41
down somewhat 2009 (36.1%), which was above the peak rates associated with previous
recessions (34.4% in 1992 and 32.7% in 2002). The figure shows that the UI recipiency rate
among discouraged potential workers who had been out of the labor force for the entire year was
21.4% in 2010, well above 12.5% in 1992, and 10.2% in 2003. However, as shown earlier in
Figure B-6, this group accounts for only a small share of persons who had limited or no labor
force attachment due to economic reasons. Among all persons with limited or no labor force
attachment for economic reasons, 26.7% reported receipt of UI benefits in 2010, down slightly
from 2009 (27.4%)—the same share as the peak recipiency rate of 1992—and somewhat above
the 25.7% rate in 2002.

41 Note, this estimate from the CPS/ASEC is considerably less than the 66% shown earlier in Figure 4, which is based
on administrative data. For a discussion of CPS/ASEC estimates compared to administrative data benchmarks, see
Appendix C.
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Figure B-6. Unemployment Insurance Receipt Among Persons,
by Selected Labor Force Status, 1987 – 2010
Percent
40%
09
91
/01
6/ 36.1%
3/
11
34.8%
34.4%
-
07 -
35%
7/90 -
12/
Unemployed
3/01
32.7%
Recessionary Period
30%
27.4%
27.4% 26.7%
25.5%
25.7%
Total Unemployed,
Underutilzed, and
25%
23.5%
Discouraged Workers
21.4%
23.0%
20.4%
Discouraged potential
21.3%
19.7%
workers, OLF
20%
17.1%
19.0%
16.1%
16.5%
17.9%
15.1%
Part-year discouraged
15%
15.8%
workers
12.2%
12.3%
10.2%
9.2%
11.4%
10%
8.5%
10.7%
7.6%
7.8%
6.0%
5.8%
5.3%
Involuntary
4.4%
4.6%
4.7%
part-time workers
5% 3.2%
1.8%
3.7%
0.5%
1.4%
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011.
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Antipoverty Effects of Unemployment Insurance

Appendix C. CPS/ASEC Estimates Versus
Administrative Benchmarks
It is difficult to compare the monthly administrative UI data on the number of individuals
receiving unemployment benefits to the one-time monthly survey CPS/ASEC data of those
individuals who have reported receiving unemployment benefits in the past year. According to the
U.S. Department of Labor (DOL) in 2010, approximately $145.1 billion in “unemployment
benefits” were distributed to individuals. These benefits included UC, EB, and EUC08 as well as
several smaller benefits such as the Disaster Unemployment Assistance and Trade Re-Adjustment
Allowances. In comparison $95.5 billion in aggregate UI benefits were reported in the
CPS/ASEC. Thus, in 2010, aggregate UI benefits reported on the CPS/ASEC accounted for about
66% of the administrative benchmark; approximately 34% of UI benefits in the aggregate were
not reported/underreported—the largest level over the 24-year period examined (see the top line
in Figure C-1).
The U.S. DOL does not calculate the number of individuals who received unemployment benefits
at any point during the year, but rather it reports the number of individuals receiving benefits as a
monthly statistic. Approximately 66% of the unemployed received unemployment benefits on
average in any given month in 2010. Using the CPS/ASEC data, this analysis estimated that
approximately 35% of the unemployed reported receiving a UI benefit at least for some point
during the year.
There may be empirical reasons for the yearly ratio to be lower than the monthly ratio. One such
reason is that generally those who receive unemployment benefit are likely to remain unemployed
longer than those who do not receive such benefits. Thus, UI recipients may be appear in the
monthly calculations for more months than non-UI recipients driving up the percentage of UI
beneficiaries in the monthly calculations relative the annual calculations where both UI
beneficiaries and non-beneficiaries are each counted one time. Given that the ratio of
underreporting the total value of UI benefits is less than the ratio of underreporting UI benefit
receipt this suggests that those who received lower values of aggregated UI benefits are more
likely to not report benefit receipt.
Figure C-1 examines this pattern of under-reporting UI benefits by comparing estimates of
aggregate UI benefits and number of recipients on the CPS/ASEC relative to DOL administrative
benchmarks, from 1987 through 2010. The two lines depict the CPS/ASEC estimate as a percent
of DOL administrative benchmarks based on UI spending and benefits data. CPS/ASEC estimates
are for persons who reported having received any type of UI benefits at any time during the year.
Estimates of the number of recipients from DOL UI administrative data are based on the total
number of persons receiving UC benefits at the beginning of the year plus the total number of
persons receiving initial monthly UC benefits during the year plus the number of persons
receiving UC for former federal workers (UCFE), UC for former service members (UCX),
Disaster Unemployment Assistance (DUA), Trade Readjustment Assistance (TRA), EB, EUC08
and the other temporary extended benefits at the beginning of the year.42

42 Mathematically, this approach will result in counting the number of first week of regular UC beneficiaries twice and
not counting any new entrants into the UCFE, UCX, and DUA program if the first benefit was paid after the first week
of the new year.
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Figure C-1 shows that aggregate benefits reported on the CPS/ASEC ranged from a low of 66%
of the administrative benchmark in 2010, to a high of 88% in 1995. As noted above, the
CPS/ASEC does an apparently better job at capturing UI dollars, in the aggregate, than it does in
the number persons receiving benefits. Over the period examined, the CPS/ASEC appears to
capture roughly 59% of persons who receive UI benefits based on claims data with the ratio
generally increasing during recessions and decreasing as the recovery takes hold. The ratio ranges
from a low of 49% in 2004, 2006, and 2007, to a high of 73% in 1993. As noted above, the
CPS/ASEC appears to do a better job in capturing aggregate UI dollars than it does in capturing
UI recipients would suggest that persons who receive comparatively small UI benefits, and/or
claim benefits for a comparatively short period of time, are less likely to report UI benefit receipt
on the CPS/ASEC.
Figure C-1. UI Recipients and Aggregate UI Dollars CPS/ASEC Estimates as a
Percent of Administrative Benchmarks 1987 to 2010
Percent
100%
Dollars
Recipients
90%
87%
88%
81%
81%
80%
81%
78%
77%
80%
76%
74%
73%
73%
72%
71%
72%
72%
71%
71%
71%
70%
71%
69%
68%
70%
66%
68%
66%
66%
66%
73%
63%
64%
61%
61%
60%
59%
59%
59%
60%
57%
58%
60%
55%
56%
56%
54%
53%
49%
49%
49%
50%
40%
30%
91
01
09
3/
Recessionary Period
11/
6/
-
90 -
/07
20%
7/
01 -
3/
12
10%
0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year

Source: Congressional Research Service (CRS) estimates from U.S. Census Bureau Current Population Survey
Annual Social and Economic Supplement (CPS/ASEC), 1988 to 2011; and DOL Unemployment Insurance
Reporting System.
Notes: Recipient estimates are based on reported receipt of UI on the CPS/ASEC and DOL UI claims data.
CPS/ASEC estimates are for persons who reported having received any type of UI benefits at any time during the
year. Estimates of the number of recipients from DOL UI administrative data are based on the total number of
persons receiving UC benefits at the beginning of the year plus the total number of persons receiving initial
monthly UC benefits during the year plus the number of persons receiving DUA, UC for federal workers, UC for
ex-military service members, trade readjustment assistance, EB, EUC08, and the other temporary federal
extended benefits at the beginning of the year.

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Author Contact Information

Thomas Gabe
Julie M. Whittaker
Specialist in Social Policy
Specialist in Income Security
tgabe@crs.loc.gov, 7-7357
jwhittaker@crs.loc.gov, 7-2587


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