Understanding Eligibility and Take-Up in State Unemployment Insurance Programs

Abstract

Unemployment insurance (UI) is the primary policy tool in the United States for addressing and accommodating labor market disruption, but it reaches only a minority of the unemployed. The choices that state policymakers make (within the constraints of the federal-state system) about explicit eligibility rules and implicit access barriers have implications for how many and which workers take up UI. The primary aims of this paper are, first, to illuminate the roles of state benefit duration caps and unemployment composition in determining UI eligibility, and second, to examine factors that limit take-up by eligible workers. We find that declining state duration caps and the rising share of long-term unemployment have both meaningfully reduced aggregate eligibility. Within the population of eligible workers, we find suggestive evidence for a variety of factors including administrative burdens faced by applicants.