Insights and Successes: American Rescue Plan Act Investments in Unemployment Insurance Modernization

Abstract

This report details the use of the historic investment of $1 billion in funding from the American Rescue Plan Act (ARPA) to the Department of Labor and state agencies to modernize state unemployment insurance (UI) programs. The report covers major successes in the areas of fraud prevention, equitable access, and timeliness. Reflecting the most pressing system needs, the funding provided to the Department centers on three goals, or "pillars," of UI modernization: detecting and preventing fraud, promoting equitable access, and ensuring the timely payment of benefits. These investments sought to address major shortcomings in the UI system revealed during the pandemic, as states worked to deliver a lifeline of unemployment benefits to record numbers of claimants after years of underinvestment in their infrastructure.