Working Paper

Racial Inequality in Unemployment Insurance Receipt and Take-Up

Abstract: This paper studies differences in receipt and take-up of unemployment insurance (UI) benefits among White and Black individuals. We combine state-level UI regulations with data containing detailed information on individuals’ work history and UI receipt. Black individuals who separate from a job are 24% less likely to receive UI than White individuals. The UI receipt gap stems primarily from lower take-up of UI benefits among likely eligible individuals, as opposed to differences in benefit eligibility. Statistical decompositions indicate that about one-half of the take-up gap is explained by Black workers’ lower pre-unemployment earnings and higher tendency to live in the South.

Keywords: racial inequality; unemployment insurance; take-up; social insurance;

JEL Classification: J15; J65; H5; I38;

https://doi.org/10.21799/frbp.wp.2022.09

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2022-03-24

Number: 22-09