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Unemployment and Re-employment

Unemployment Benefits Reduce Poverty

The Congressional Research Service released a report on the: Antipoverty Effects of Unemployment Insurance (UI) [pdf].

This report examines the antipoverty effects of unemployment insurance benefits during the past recession and the economic recovery. The analysis highlights the impact of the additional and expanded unemployment insurance (UI) benefits available to unemployed workers through the American Recovery and Reinvestment Act and the Emergency Unemployment Compensation program. In 2011, approximately 56% of all unemployed individuals were receiving UI benefits (down from a high of 66% in 2010). UI benefits appear to have a large poverty-reducing effect among unemployed workers who receive them. Given the extended length of unemployment among jobless workers, the additional weeks of UI benefits beyond the regular program’s 26-week limit appear to have had an especially important effect in poverty reduction.

The report’s analysis shows that UI benefits appear to reduce the prevalance of poverty significantly among the population that receives them. The UI benefits’ poverty reduction effects appear to be especially important during and immediately after recessions. The analysis also finds that there was a markedly higher impact on poverty in the most recent recession than in the previous two recessionary periods. The estimated antipoverty effects of UI benefits in 2011 were about 50% higher than that of two previous peak years of unemployment — 1993 and 2003.

In 2011, over one quarter (26.5%) of unemployed people who received UI benefits would have been considered poor prior to taking UI benefits into account; after counting UI benefits, their poverty rate decreased by just under half, to 13.8%.

NELP Reports on the Value of the Public Re-Employment Services

The National Employment Law Project (NELP) recently issued a briefing paper titled: Getting Real: Time to Re- Invest in the Public Employment Service [pdf].

The paper highlights the value of reemployment services. Their briefing calls for a “renewed focus on reemployment services,” with substantial increases in federal funding for the Employment Service. According to NELP, increased funding for the Employment Services would allow states to provide more services to job seekers such as: job placement services, in-person job search assistance, and pre-training counseling. In addition to increased federal funding, NELP recommends prioritizing those who are receiving unemployment insurance.