Who Benefited Most from the CARES Act Unemployment Insurance Provisions?
Summary:
The regular unemployment insurance (UI) program in the United States requires workers to have a minimum amount of earnings as well as a sufficient work history before unemployment. Low-wage workers are more likely to have a short work history before unemployment because they are more likely to be separated from their jobs. Pandemic Unemployment Assistance (PUA) under the CARES Act temporarily eliminated the requirements for minimum past earnings and length of employment, thus making many low-wage workers who were ineligible for UI under the regular program temporarily eligible. The extra weekly benefit provided by Federal Pandemic Unemployment compensation (FPUC) under the CARES Act UI was also more important to low-wage workers. Hence low-wage workers benefited more from the CARES Act UI policies.
Key findings:
- The regular unemployment insurance (UI) program in the United States requires workers to have a minimum amount of earnings and a sufficient work history before unemployment.
- Low-wage workers are more likely to have a short work history before unemployment because they are more likely to be separated from their jobs.
- Pandemic Unemployment Assistance (PUA) under the CARES Act temporarily eliminated the requirements for minimum past earnings and length of employment, thus making many low-wage workers who were ineligible for UI under the regular program temporarily eligible.
- The extra weekly benefit provided by Federal Pandemic Unemployment Compensation (FPUC) under the CARES Act UI was more important to low-wage workers.
- Hence, low-wage workers benefited more from the CARES Act UI policies.
Center Affiliation: Center for Human Capital Studies
JEL classification: J64, J65, E24
Key words: CARES Act, PUA, unemployment insurance, minimum past earning requirement, labor markets, fiscal policy
https://doi.org/10.29338/ph2022-4
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