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

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. Replication codes for this paper are available at https://github.com/avdluduvice/LuduviceTruss-Williams_UI.