How Insured Are Workers Against Unemployment? Unemployment Insurance and the Distribution of Liquid Wealth

RePEc Short ID: pdo535
ORCID iD: 0000-0003-4096-5897

Luduvice, Andre; Truss-Williams, Anaya

doi:10.26509/frbc-ec-202416

Journal Article

How Insured Are Workers Against Unemployment? Unemployment Insurance and the Distribution of Liquid Wealth

Abstract: In this Economic Commentary, we analyze the relationship between unemployment insurance (UI) recipiency and insurance by examining the wealth distribution of workers who have been through an unemployment spell. We focus on the net liquid wealth gap between recipients and nonrecipients of UI along the income distribution of the unemployed. Using recent data from the Survey of Income and Program Participation at the individual level, we estimate that UI recipients at the bottom half of the income distribution tend to have higher median net liquid wealth than nonrecipients, putting nonrecipients in a potentially vulnerable economic position during periods of unemployment.

Keywords: Unemployment Insurance (UI); Survey of Income and Program Participation (SIPP); Financial well-being; Labor economics; Public Finance;

https://doi.org/10.26509/frbc-ec-202416