Board of Governors of the Federal Reserve System

Figure 1. Unemployment Insurance: Recipients and Benefits

A 3 panel figure. Panel A shows the number of UI recipients in millions in the IRS and CPS data in each year from 2000 through 2020. In each year, the IRS data has more UI recipients than the IRS data. Prior to 2020, the number of UI recipients in the IRS data peaked at about 20 million in 2009 and 2010 while the CPS data peaked at about 13 million. In 2020, IRS data had 45.4 million UI recipients and the CPS had 23.6 million. Panel B shows the amount of UI benefits in billions in the IRS and CPS data in each year from 2000 through 2020. In each year, the IRS data has more UI benefits paid than the IRS data. In 2020, the IRS data had $565 billion in benefits paid and the CPS data had $218 billion in benefits paid. Panel C shows the ratio between benefits paid recipients in the CPS and IRS data. The CPS never captures more than 73 percent of benefits nor more than 66 percent of recipients. In 2020, the CPS captured 38 percent of benefits and 52 percent of recipients, relative to the IRS data.

Figure 2. Cumulative Share of UI Benefits, among recipients (by year)

Chart plots the individual level UI benefit amount on the x axis and the share of UI recipients with benefits at or below this amount on the y axis. It has 4 lines – IRS data in 2019, IRS data in 2020, CPS data in 2019, and CPS data in 2020. The curve for the 2019 IRS data and 2019 CPS data are similar in shape, with the IRS falling slightly above and to the left of the CPS data. In 2020, the curves for the IRS and CPS data are more different, and the IRS data line is to the right of the CPS data line. This indicates that benefit recipients in the IRS data received higher levels of benefits, on average, than is captured in the CPS data.

Figure 3. Distribution of UI benefits by recipient income (by year)

A 3 panel figure. Panel A is for 2020. Panel B is for 2009. Panel C is for 2019. In each figure, the decile of modified market income is on the x axis and total UI benefits in billions are on the y axis. Each figure shows two series, one for the IRS data and one for the CPS data. In Panel A for 2020, UI benefits paid were greatest for the bottom decile, with $120 billion of benefits paid, and decline as modified market income rises. In the CPS data, the bottom decile received $11 billion of benefits, which is below the benefits paid to higher deciles. In all deciles, the IRS benefits exceed the CPS benefits. In Panel B for 2009, IRS benefits are concentrated among the bottom decile – IRS benefits to this decile were $31 billion compared to $13 billion in the CPS data. Among higher deciles, the two series are far closer. In 2019, benefit levels in both the IRS and CPS data are lower, so gaps between the two series are smaller.

Figure 4. Distribution of UI benefits vs. UI exclusion tax expenditure, 2020

Chart plots the decile of modified market income on the x axis and percent on the y axis. The figure has two bars for each decile. One bar is the percent of UI benefits, the other is the percent of the tax exclusion benefits. The figure shows that the greatest share of UI benefits goes to the bottom deciles, and the share decreases as income rises. The UI tax exclusion benefits increase with income through the 4th decile, is then steady through the 8th decile, and declines for the top two deciles.