Temporary Programs to Extend Unemployment Compensation

Abstract

[From Summary] The federal/state unemployment compensation (UC) system is designed to provide temporary and partial wage replacement to workers who have become involuntarily unemployed. UC also helps to stabilize the economy by providing unemployed workers with additional purchasing power, which serves as an economic stimulus when unemployment rises during recessions. The UC system generally provides sufficient duration of benefits during periods of economic prosperity, as most UC beneficiaries experience fewer weeks of unemployment than their maximum entitlements and return to work before their benefit rights are exhausted. However, during periods of economic decline, people tend to remain unemployed longer because of the greater difficulty in finding new jobs, and a rising proportion of jobless workers exhaust UC benefits without finding new work. Thus, programs have been established to increase the number of weeks of assistance during periods of high unemployment.