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How Well Insured are Job Losers? Efficacy of the Public Safety Net

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  • Chloe N. East
  • David Simon

Abstract

An extensive literature documents large and persistent declines in earnings following job loss. We study how the public safety net mitigates this using the 1996-2013 Survey of Income and Program Participation. Using an individual fixed effects model, we document which public programs provide the most insurance, and how this varies by pre-job loss characteristics. We find that Unemployment Insurance provides the largest buffer against lost income, but that the neediest are less well insured compared to middle- and higher- income job losers. This has important implications for the progressivity of the safety net, and how best to support displaced workers.

Suggested Citation

  • Chloe N. East & David Simon, 2020. "How Well Insured are Job Losers? Efficacy of the Public Safety Net," NBER Working Papers 28218, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28218
    Note: LS PE
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    Cited by:

    1. Martti Kaila & Emily Nix & Krista Riukula, 2021. "Disparate Impacts of Job Loss by Parental Income and Implications for Intergenerational Mobility," Opportunity and Inclusive Growth Institute Working Papers 53, Federal Reserve Bank of Minneapolis.
    2. Elira Kuka & Bryan A. Stuart, 2021. "Racial Inequality in Unemployment Insurance Receipt and Take-Up," NBER Working Papers 29595, National Bureau of Economic Research, Inc.
    3. Hershbein, Brad & Stuart, Bryan A., 2023. "Place-based consequences of person-based transfers: Evidence from recessions," Journal of Public Economics, Elsevier, vol. 224(C).
    4. Farzana Afridi & Kanika Mahajan & Nikita Sangwan, 2022. "Employment Guaranteed? Social Protection During a Pandemic," Oxford Open Economics, Oxford University Press, vol. 1, pages 1-15.
    5. Ahammer, Alexander & Packham, Analisa, 2023. "Effects of unemployment insurance duration on mental and physical health," Journal of Public Economics, Elsevier, vol. 226(C).
    6. Nathaniel Pattison, 2024. "Landlords as Lenders of Last Resort? Late Housing Payments During Unemployment," Departmental Working Papers 2401, Southern Methodist University, Department of Economics.
    7. Matthew Freedman & Yoonjung Kim, 2022. "Quasi‐Experimental Evidence on the Effects of Expanding Cash Welfare," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(3), pages 859-890, June.

    More about this item

    JEL classification:

    • H0 - Public Economics - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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