Workforce Security Research Publications
UI As An Automatic Stabilizer
In recent years, some economists and policymakers have come to believe that the federal-state unemployment insurance (UI) system plays an ever-diminishing role as a stabilizing force in the U.S. economy. This report takes a fresh look at UI's effectiveness and relative importance as an automatic economic stabilizer. The report reviews the arguments made by critics of the program, updates previous quantitative studies of UI's economic stabilization effect, and introduces a new, expanded model to test the program's effectiveness over the last 25 years. The report concludes there is no evidence to support the view that the structure of the economy has changed in any way that diminishes the effectiveness of the UI program. This conclusion is demonstrated by the econometric analyses, simulations, and other statistical measurements undertaken in this study.
Download/View the Executive Summary in .pdf
Download/View the Complete Report in .pdf
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