|Decision Makers:||State Government Federal Government|
|Population Reach:||20-49% of WI's population|
|Impact on Disparities:|
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The Unemployment Insurance (UI) program provides compensation to unemployed eligible workers looking for work. It is administered by states under general federal guidelines, with eligibility, amount, and duration of benefits determined by each state. Workers who have recently joined the workforce, part-time workers, and seasonal workers generally do not have enough hours of employment to be eligible for UI benefits or are explicitly excluded by state regulations. Unemployment compensation through the UI program may be extended by federal or state governments during economic downturns and recessions, when jobs are scarce.
There is some evidence that unemployment insurance (UI) allows individuals and families to avoid sudden reductions in income and maintain basic standards of living as an unemployed member searches for work (NBER-Kroft 2011, Bloemen 2005, NBER-Chetty 2004, Gruber 1997). Additional evidence is needed to confirm effects and determine optimal benefit levels and durations.
Unemployment insurance can prevent drops in food consumption, particularly among poorer households (NBER-Kroft 2011, Bloemen 2005, Gruber 1997). UI and extended UI benefits can keep families from falling into poverty (Urban-Simms 2008, Mathematica-Corson 1999), though often not without an additional source of income (Mathematica-Corson 1999). Unemployment insurance may also reduce the likelihood of future unemployment spells (Schmieder 2012b) and may positively affect re-employment wages for some recipients (Addison 2000).
Unemployment insurance and benefit extensions increase the chance that unemployed individuals will remain unemployed for longer periods of time than they would without these benefits (Schmieder 2012b, Meyer 1990). Though there is no evidence that UI recipients do not actively seek work (Ashenfelter 2005), the likelihood of gaining employment has been shown to increase as benefit eligibility nears its end (Campbell-Filges 2013).
Higher UI benefit rates may induce non-workers to work for part of the year in order to qualify for benefits (Riddell 2010) or encourage those who may not have applied for UI at lower benefit levels to file claims (NBER-Meyer 2007, Riddell 2010). Increased rates may also increase the duration of unemployment for individuals in households with limited liquid assets (Chetty 2008, NBER-Meyer 2007).
Extending UI eligibility for longer periods of time, frequently done during recessions or downturns, may increase the unemployment rate by very small amounts -- estimates from the Great Recession range from 0.1-0.5 percentage points (Rothstein 2011). Some researchers suggest that this increase may be due in part to the long-term unemployed, who remain part of labor force calculations by continuing to file and actively searching for work (Rothstein 2011, Howell 2011).
All states provide unemployment benefits to workers who have been laid off from their positions and who are searching for full-time work. Some states allow limited earnings while receiving UI to encourage acceptance of part-time or short-term work while searching for full-time employment. Many states only provide unemployment benefits to workers searching for part-time employment under specific conditions (US DOL-UI).
When determining benefit eligibility, most states recognize a small number of reasons as “good cause” for voluntarily leaving employment, which can include compulsory retirement, sexual or other harassment, or personal illness. Some also provide benefits to individuals forced to leave work for additional “good cause” reasons, such as domestic violence, spousal relocation, or care for a family member (US DOL-UI).
In Wisconsin, individuals must be seeking full-time work to qualify for unemployment benefits. Wisconsin recognizes some “good cause” reasons, including domestic violence (US DOL-UI).
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