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CBO: Unemployment Insurance Benefits and Family Income of the Unemployed

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Unemployment Insurance Benefits and Family Income of the Unemployed, November 17, 2010

  • “The unemployment insurance (UI) program provides a weekly benefit to qualified workers who lose their job and are actively seeking work. The amount of that benefit is based in part on a worker’s past earnings. The composition of the worker’s family and the income of the family as a whole are not generally taken into account. Nevertheless, the worker’s whole family is likely to be affected both by the spell of unemployment itself and by the support that the UI benefit provides. The Congressional Budget Office (CBO) examined the role of UI benefits in supporting the income of families in which at least one person was unemployed at some point in 2009. The analysis addressed how that role varied with the amount of family income and the number of weeks of unemployment for all family members. CBO also examined how the poverty rate and related indicators of financial hardship would have differed in the absence of the UI program. The unemployment rate averaged 9.3 percent in 2009, more than double what it was in 2007 and the highest it had been since 1983.1 In 2009, nearly one in four people (including children) lived in a family in which at least one family member was unemployed at some time during the year.2 Among people living in a family with income below the poverty threshold, one in three lived in a family in which at least one person was unemployed at some point.”
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