Working Paper
COBOLing Together UI Benefits: How Delays in Fiscal Stabilizers Affect Aggregate Consumption
Abstract: The United States experienced an unprecedented increase in unemployment insurance (UI) claims beginning in March 2020. State UI-benefit systems were strained beyond their administrative capacity to process the dual challenge of an unprecedented increase in claims and changes to UI benefits. In states that used an antiquated programming language, COBOL, to process claims, potential claimants experienced a larger increase in administrative difficulties, resulting in longer delays in benefit disbursement. States that used an antiquated UI-benefit system experienced a 2.8 percentage point decline in total credit and debit card consumption relative to card consumption in states with more modern UI benefit systems. Furthermore, states that used these antiquated systems experienced at least a 2.1 percentage point increase in the share of claims that were delayed by more than 70 days.
JEL Classification: E24; J65; E21; I38;
https://doi.org/10.29338/wp2025-14
Status: Published in 2025
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Bibliographic Information
Provider: Federal Reserve Bank of Atlanta
Part of Series: FRB Atlanta Working Paper
Publication Date: 2025-10-16
Number: 2025-14