Data Point: The Impact of Extending Unemployment Insurance Benefits in California

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.

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Impact of Extending Unemployment Insurance Benefits in California

Published December 14, 2020

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

Editor’s note (12/21/2020): This analysis was published on December 14, 2020, based on the Emergency COVID Relief Act of 2020 extending federal unemployment programs by 16 weeks and providing a federal $300 supplement for 16 weeks.  It appears the new stimulus bill, if passed, will only extend the federal unemployment programs for 11 weeks and provide the extra $300 federal supplement for 11 weeks. 

Overview: Under the CARES Act, Congress created two federal unemployment programs, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). However, these two programs are slated to expire on December 26th, 2020 unless Congress passes new legislation to extend them. If Congress is unable to pass such legislation, our latest projections find that over one million Californians will stop receiving unemployment insurance benefits by the end of 2020, despite remaining unemployed. This Data Point analyzes a bi-partisan proposal, the Emergency COVID Relief Act of 2020 that would extend the PUA and PEUC programs by 16 weeks (through April 17th) while also extending the maximum length a person could receive benefits under these programs. We show this proposal would be extremely effective in reducing the incidence of benefit exhaustion, reducing the number of claimants who stop receiving benefits before April 10th by 95%. This new proposal would provide nearly $10 billion in direct payments to unemployed Californians by mid-April, with indirect benefits spilling over to business owners and the wider labor market.

DATA POINT: Impact of Extending Unemployment Insurance Benefits in California PDF

PRESS RELEASE: Bipartisan Proposal Would Save 1 Million Californians from Losing Unemployment Benefits on December 26th

 

 

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