The Benefits of Unemployment Insurance During A Recession

Date Published: 
Thu, 07/01/2010

Dr. Wayne Vroman. The Urban Institute. July 2010. 

The Role of Unemployment Insurance As an Automatic Stabilizer During a Recession” explains the macroeconomic implications of unemployment insurance (UI). By ensuring the purchasing power of the unemployed, the government is able to hamper the downward spiral of reduced employment, leading to reduced consumption, leading to reduced economic activity.

Vroman then examines the impact UI had during the recent recession. He finds that “the UI program has provided stronger stabilization of real output than in many past recessions”.