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US / Unemployment Insurance: Extended benefits have added more than 125 percent over the past two years

“Unemployment insurance programs insure workers against the risk of lost income if they lose their job through no fault of their own. In the U.S., the program is run at the state level. Each state sets its benefit level and eligibility criteria, and finances these benefits through payroll taxes.2 ” write David L. Fuller, B. Ravikumar and Yuzhe Zhang in Unemployment Insurance: Payments, Overpayments and Unclaimed Benefits.

Typically, the unemployment benefits last for a maximum of 26 weeks. These regular unemployment benefits paid by the states increased sharply during the recent recession. Measured in 2005 dollars, these benefits more than doubled, from $31 billion in 2007 to almost $72 billion in 2009. Since 2009, these regular benefits have decreased to levels below what they were after the previous recession: In 2011, the unemployment insurance program spent less than $42 billion on regular benefits, while the corresponding figure in 2002 was more than $46 billion.3

In periods of high unemployment, benefits may be continued for additional weeks beyond the regular cap of 26. Most states offer an additional 13 weeks of benefits when the unemployment rate in that state remains above a certain threshold. The federal government may also finance more benefits. For example, the federal government recently provided financing to some states to extend their benefits to a maximum of 99 weeks. During the early 1990s, the extended benefits added 60 percent to the regular benefits. During the past two years, the extended benefits have added more than 125 percent.

Choosen excerpts by Job Market Monitor from

FireShot Screen Capture #377 - 'Unemployment Insurance_ Payments, Overpayments and Unclaimed Benefits' - www_stlouisfed_org_publications_re_articles__id=2285

via Unemployment Insurance: Payments, Overpayments and Unclaimed Benefits.

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