Expanding Unemployment Insurance Coverage

Abstract

I develop a quantitative framework to study the impact of Unemployment Insurance (UI) expansions to workers earning below eligibility thresholds. A model of UI is calibrated to replicate experiences of the eligible and ineligible, including consumption after job loss. Eligibility rules distort labor supply in costly ways and removing them would benefit workers across the income spectrum, even with consideration of funding costs. The model captures job-finding rates by eligibility that I document during the GFC and COVID-19 recessions. Although expanded eligibility during COVID-19 lowered job-finding rates, other changes in UI policy were more impactful.

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