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Macroeconomic Effects of UI Extensions at Short and Long Durations

Author

Listed:
  • Miguel Acosta
  • Andreas I. Mueller
  • Emi Nakamura
  • Jón Steinsson
Abstract
We study the macroeconomic effects of unemployment insurance (UI) benefit extensions in the United States at short and long durations. To do this, we develop a new state level dataset on trigger variables for UI extensions and a “UI Benefits Calculator” based on detailed legislative and administrative sources spanning five decades. Our identification approach exploits variation across states in the options governing the Extended Benefits program. We find that UI extensions during time periods when UI benefit durations are already long—such as in the Great Recession—have minimal effects. However, UI extensions at shorter initial durations have substantial effects on the unemployment rate and the number of people receiving UI, with larger estimates during Covid. We relate our estimates to microeconomic estimates of the effects of UI extensions through the lens of partial and general equilibrium models.

Suggested Citation

  • Miguel Acosta & Andreas I. Mueller & Emi Nakamura & Jón Steinsson, 2023. "Macroeconomic Effects of UI Extensions at Short and Long Durations," NBER Working Papers 31784, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31784
    Note: EFG LS ME PE
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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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