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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Half of the UI Recipients in California Are Now Considered “Long-Term Unemployed”
Published March 18, 2021
By Alex Bell, Thomas J. Hedin, Roozbeh Moghadam, Geoffrey Schnorr and Till von Wachter
Key Research Findings
1. As of mid-February, about half of all UI recipients have claimed 26 weeks of UI benefits or more. Long-term unemployment (LTU), defined here as claiming UI benefits for more than 26 weeks, is known to cause long-lasting scarring effects to workers and the economy. The incidence of LTU is particularly high among Black workers, older workers, women, less-educated workers, and PUA claimants.
2. Female workers, less-educated workers, and millennials have disproportionately benefited from the December extensions of the PUA and PEUC programs. Over half of all workers receiving benefits under the PEUC and FED-ED extension programs reported having no more than a high school degree, despite making up just 33% of the labor force.
3. Workers faced a rough start to 2021, with nearly 1 in 5 workers paid UI benefits in February. While the number of individuals receiving UI benefits dropped slightly in December, this decline was likely artificial. In the first six weeks of 2021, there was little change to the total number of workers receiving UI benefits in California, only movement between programs.
These measures are based on CPL’s new measure of Continuing Claims, which counts the number of individuals paid benefits for unemployment experienced in that week. (For more information see pages 13-14 of our report.) This is different from the standard measure of continuing claims (which counts the number of payments processed in a given week), which matters because workers who exhausted benefits before December 26th have not been able to certify for benefits until at least March 7th. Once these claimants are able to certify retroactively, our measure will provide a more accurate look at the state of the economy throughout the winter.
4. Since the start of the crisis, over 45% of workers who were in the labor force in February 2020 have claimed UI benefits. 9.2 million unique California claimants have filed for some type of UI benefits in the last year. The fraction of the pre-pandemic labor force having claimed UI benefits is close to 90% among Black workers, 73% among Asian workers with no more than a high-school degree, close to 70% among Generation Z workers, and 50% among female workers.
5. Total Initial Claims declined in February, but were still 50% larger than the peak seen in the Great Recession. Average initial claims were 173,000 in February, which is 40,000 fewer than in January. “Additional Claims” (the re-opening of a claim after a claimant has returned to work) continue to make up the majority (75%) of initial claims.