Benefit risk, claim timing, and Unemployment Insurance benefit generosity in California

Grant description:

Many social insurance programs replace some percentage of prior earnings while a claimant is away from work during a shock, such as unemployment, disability, or the birth of a child. Implementation relies on “base periods” from which prior earnings are measured in order to establish the wage replacement rate. This project will explore the base period and its implications for a large subset of primarily low-income program recipients. Focusing on California’s Unemployment Insurance program and combining three administrative datasets, this researcher seeks to explain how earnings volatility, among other factors, can impact the value of Unemployment Insurance and claimant experience with the program. Other research shows that low-income workers experience significant volatility in earnings, partially due to a lack of control over how many hours of work they are given. Understanding how income volatility in the base period impacts subsequent volatility/income decline while receiving benefits is an important policy question.