An Analysis of Unemployment Insurance Durations since the 1990-1992 Recession

Abstract

This report examines the reasons that average Unemployment Insurance (UI) durations have increased relative to historical norms. The review of the literature on UI durations presented in this report suggests several potential reasons for the recent increases, including 1) changes in UI laws that affect duration; 2) changes in the geographic distribution of claimants among the states and; 3) changes in the composition of the unemployed population that tend to favor longer durations. To assess the relative importance of these effects, the report contains a detailed analysis of aggregate data at both the national and state levels. It also includes an examination of claimant-level data, from four states, that seek to identify possible effects that may have been obscured in the aggregate statistics. The general conclusion of the analysis is that most of the increase in average UI durations is coming from the labor market itself (most notably from the increased average length of workers' unemployment spells), not from changes in UI policy.