Macroeconomic effects of UI extensions at short and long durations

We study the macroeconomic effects of unemployment insurance (UI) benefit extensions in the United States at short and long durations. To do this, we develop a new state level dataset on trigger variables for UI extensions and a “UI Benefits Calculator” based on detailed legislative and administrative sources spanning five decades. Our identification approach exploits variation across states in the options governing the Extended Benefits program. We find that UI extensions during time periods when UI benefit durations are already long - such as in the Great Recession - have minimal effects. However, UI extensions at shorter initial durations have substantial effects on the unemployment rate and the number of people receiving UI, with larger estimates during Covid. We relate our estimates to microeconomic estimates of the effects of UI extensions through the lens of partial and general equilibrium models.