Job Losers are More likely to be Eligible for Unemployment Benefits

Came across some interesting data in an article from the US Bureau of Labor and Statistics which highlighted the reported gap between people unemployed vs. those receiving unemployment insurance (UI). Based on the most recent data there were 23 million people counted as unemployed versus 18 million getting benefits at that time. This is shown in the graph below. The “UI claims” gap is in large part due to each states’ ability to process and manage new claims.

The recent spike in unemployment and the persistence of the gap in claims, despite the enhanced unemployment provisions in the CARES act which expanded UI eligibility, confirms the ongoing challenges states are having with processing and managing UI claims.

Another interesting data point in the BLS article was that job losers, people who become unemployed after losing their jobs via a lay-off or completing a contract/temp job, are more likely to be eligible for UI benefits. Job losers are different to job leavers, who quit or leave their job voluntarily and are likely to find it harder to qualify for benefits.

The likely reason for the gap in payments is due to delays in initial claims processing. These are new claims people filed to request UI benefits and won’t necessarily all be approved if, for example, a state UI program determines the person isn’t eligible to receive benefits. This is what is causing a lot of newly unemployed to miss out on UI benefits since state systems had not been updated to handle the extra unemployment provisions.

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