December 21st Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic

Background: The COVID-19 crisis has led to historically unprecedented increases in the level of initial Unemployment Insurance (UI) claims filed in California since the start of the crisis in mid-March. Through a partnership with the Labor Market Information Division of the California Employment Development Department, the California Policy Lab is analyzing daily initial UI claims to provide an in-depth and near real-time look at how the COVID-19 crisis is impacting various industries, regions, counties, and types of workers throughout California.

The Policy Briefs are updated on a monthly basis.

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December 21st Policy Brief

By Alex Bell, Thomas J. Hedin, Geoffrey Schnorr and Till von Wachter

REPORT: December 21st Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic PDF

TECHNICAL APPENDIX: Technical Appendix PDF

PRESS RELEASE: New Analysis: California’s Recovery Has Been Slow, Especially in Low-Income Communities and Communities of Color Where Unemployed Workers Were Less Likely to Collect Benefits

Key Research Findings

1. The total number of people receiving UI benefits each week is no longer falling – a sign the recovery has stalled. While the number of people receiving benefits each week was steadily decreasing from August to mid-October, this number has been effectively unchanged since then. For the first time in our report series, our measure of continuing claims numbers attempts to adjust the raw counts in order to account for historical patterns of lags in processing benefit certifications, creating a more accurate picture of how the number of the number of claimants receiving benefits evolves over time.  

2. For the first time, we are able to count the number of UI Claimants at the neighborhood level. Doing so reveals a slower rate of recovery in poorer neighborhoods, as well as those with more COVID cases. These findings are consistent with a growing body of research that finds that economic recovery has been slower for lower-income workers, foreshadowing a potential “K-shaped” recovery.

California: Recent Recovery Index: This index measures how well communities have recovered, as measured by the number of people claiming UI benefits in the last week of October as compared to the peak of the crisis in mid-May. A score of 100 means a community had returned to pre-crisis levels of people claiming UI, whereas a score of 0 means a community has the same number of people claiming as it did in mid-May. (Clicking the image below will open an interactive map in a new tab, which may take a minute to load depending on your computer and internet connection.)


Notes: For this map, the Recovery Index was top-coded at 100%. See full report for detailed definition.

Los Angeles County: June/July Claims

Notes: Percent of labor force or unemployed receiving benefits are averages over June and July CPS weeks. Recovery Index uses more recent data from October, as described in the report.

 

California: June/July Claims (clicking the image below will open an interactive map in a new tab, which may take a moment to load depending on your computer and internet connection)

Notes: Percent of labor force or unemployed receiving benefits are averages over June and July CPS weeks. Recovery Index uses more recent data from October, as described in the report.

 

3. Residents of already-disadvantaged neighborhoods were least insured against the job losses of the pandemic. Unemployed people in communities of concentrated poverty and with higher shares of racial and ethnic minorities have been less likely to receive regular UI benefits. Descriptive analysis across California’s 8,000 Census tracts suggests that a variety of channels – including legal work authorization, language, and the technological divide – may play a role in some unemployed workers not being able to access UI benefits during the pandemic. Further research is urgently needed to better understand what factors have contributed to these patterns. Although the focus of our analysis is on regular UI, preliminary results suggest that claims under the PUA program have also shown similar geographic patterns.


4. The pandemic’s disparate impact by race remains evident among UI claimants. Almost 85% of the Black labor force has filed for unemployment benefits since the beginning of the pandemic in mid-March. In the week ending November 14th, 42% of the Black labor force filed a continuing claim for UI benefits.

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