Emergency Unemployment Compensation: The 1990s Experience
Mathematica Policy Research
The federal-state Unemployment Insurance (UI) program offers assistance to workers who have lost their jobs through no fault of their own. In all states, the level of cash benefits paid is based on previous wages earned, and the duration of benefits is limited, typically up to a maximum of 26 weeks. However, the federal government has extended the duration of benefits during every recession since the 1950s. Most recently, the Emergency Unemployment Compensation Act of 1991 created the Emergency Unemployment Compensation (EUC) program. The program, extended by subsequent amendments to the act, paid federally financed extended benefits from November 1991 through April 1994. More than $28 billion in benefits was paid under the program. This evaluation of the EUC program examines a series of questions about extended benefits policy that were raised by implementation of the program. Included are broad questions about the cyclical adequacy of the program and its employment stabilization effects, as well as more specific questions about the program's effects on claimant behavior, mechanisms that could be used to initiate extended benefit policies, and how emergency extended benefit programs could be integrated with the regular UI and the permanent Extended Benefits (EB) program.