Extending Unemployment Compensation Benefits During Recessions
Prepared for Members and Committees of Congress
This report describes the history of temporary federal extensions to unemployment benefits from
1980 to the present. Among these extensions is the Emergency Unemployment Compensation
(EUC08) program created by P.L. 110-252 and amended by P.L. 110-449. Additionally,
information is included on economic recessions, changes in unemployment levels compared to
the same month in the previous year, and the legislative timing of those additional federal
unemployment benefits during this period.
This report contains four sections. The first section provides background information on
unemployment compensation (UC) benefits. It also provides a brief summary of UC benefit
exhaustion and how exhaustion rates are related to the business cycle.
The second section provides the definition of a recession as well as the determination process for
declaring a recession. It also provides information on the timing of all recessions since 1980.
The third section summarizes the legislative history of federal extensions of unemployment
benefits. It includes information on the permanently authorized extended benefit (EB) program as
well as information on temporary unemployment benefit extensions. It also includes a brief
discussion on the role of extended unemployment benefits as part of an economic stimulus
The fourth section provides a summary of the timing of recessions, the changes in unemployment
levels compared to the same month in the previous year, the unemployment rate, changes in long-
term unemployment, changes in the exhaustion of regular UC benefits, and temporary federal
extended unemployment benefit programs.
The Appendix contains tables summarizing the legislative history of federal extensions of
Unemployment Compensation and Exhaustion of Benefits...........................................................1
UC Benefits and Duration.........................................................................................................1
Generosity of Unemployment Benefits and Disincentives to Find Work...........................2
UC Benefit Exhaustion.............................................................................................................2
Recessi ons ..................................................................................................................... .................. 4
Determination of a Recession...................................................................................................4
Current Recession Began December 2007..........................................................................5
Recessions from 1980 to Present..............................................................................................5
Federal Programs of Extended Unemployment Compensation.......................................................5
Extended Benefit (EB) Program (Determined at the State Level)............................................5
Methods for Determining 20 Weeks of Full-Time Insured Employment...........................6
Temporary Federal Extensions of Unemployment Benefits: Congressional
Intervention in Recessions.....................................................................................................7
Temporary Extended UC Benefits as Economic Stimulus........................................................8
Assessing the Labor Market: Determining When to Intervene......................................................9
Using the Insured Unemployment Rate vs. Total Unemployment Rate...................................9
National, State, and Sub-State Triggers...................................................................................10
Increases in Unemployment of at Least One Million Unemployed as Compared to the
Same Month in the Previous Year.........................................................................................11
Other Measures: Changes in Long-Term Unemployment and Changes in UC
Figure 1. Economic Recessions, Percent of Regular UC Beneficiaries to All Unemployed,
and UC Benefit Exhaustees, January 1979- October 2008..........................................................4
Figure 2. Recessions, Changes in Unemployment Compared to Same Month in Previous
Year, Unemployment Rates, and Temporary Federal Benefit Availability, January 1979-
Figure 3. Recessions, Changes in Regular UC Benefit Exhaustions as Compared to the
Same Month in Previous Year, and Unemployment Rates, January 1979- October 2008.........14
Figure 4. Recessions, Changes in Long-Term Unemployment Compared to the same
Month in Previous Year, and Unemployment Rates, January 1979-October 2008....................15
Table A-1. Summary of Extended Unemployment Compensation Programs...............................16
Table A-2. Details: Federal Supplemental Compensation (FSC) Benefits....................................18
Table A-3. Details: Emergency Unemployment Compensation (EUC) Benefits of 1991.............19
Table A-4. Details: Emergency Unemployment Compensation (EUC08) Benefits of 2008.........20
Table A-5. Timing of Recessions, Changes in Unemployment of at Least One Million
Unemployed Compared to Same Month in Previous Year, and Extended
Unemployment Benefits, 1990-2008.........................................................................................21
Appendix. Related Tables..............................................................................................................16
Author Contact Information..........................................................................................................23
The cornerstone of an unemployed worker’s income support is the joint federal-state 1
Unemployment Compensation (UC) program, which may provide income support through the
payment of UC benefits. The underlying framework of the UC system is contained in the Social
Security Act. Title III of the act authorizes grants to states for the administration of state UC laws,
Title IX authorizes the various components of the federal Unemployment Trust Fund (UTF), and
Title XII authorizes advances or loans to insolvent state UC programs. UC is financed by federal
taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under the State
Unemployment Tax Acts (SUTA).
The federal government funds federal and state UC program administration, the federal share
(50%) of Extended Benefit (EB) payments, and federal loans to insolvent state UC programs.
States fund regular state UC benefits and the state share (50%) of EB payments. In FY2008, the
states received an estimated $2.73 billion from the federal government for the administration of
their regular UC programs and for the administration of the federal Emergency Unemployment
Compensation (EUC08) program. In FY2008, states spent an estimated $38.1 billion on regular
UC benefits and $4.1 million on EB payments.
Workers who lose their jobs face serious long-term economic implications. In general, they face a
substantially reduced probability of full-time employment and an increased probability of part-
time employment. Those workers who find new full-time employment on average experience
significantly decreased earnings relative to what they earned before they lost employment. The
UC program pays benefits to workers in covered employment who become involuntarily
unemployed for economic reasons and meet state-established eligibility rules. The UC program
generally does not provide UC benefits to the self-employed, to those who are unable to work, or
to those who do not have a recent earnings history. States usually disqualify claimants who lost
their jobs because of inability to work or unavailability for work, who voluntarily quit without
good cause, who were discharged for job-related misconduct, or who refused suitable work 2
without good cause.
This temporary unemployment insurance benefit is designed to be sufficient to meet an
unemployed worker’s basic obligations until the worker finds a new position. Generally, benefits
are based on wages for covered work over a 12-month period. The entitlement formula varies by
state, typically requiring a substantial work history and replacing approximately 50%-80% of
For more information on UC, see CRS Report RS22538, Unemployment Compensation: The Cornerstone of Income
Support for Unemployed Workers, by Julie M. Whittaker, and CRS Report RL33362, Unemployment Insurance:
Available Unemployment Benefits and Legislative Activity, by Julie M. Whittaker. For information on the most recent
temporary federal unemployment benefit extension, see CRS Report RS22915, Temporary Extension of Unemployment
Benefits: Emergency Unemployment Compensation (EUC08), by Julie M. Whittaker.
2 Workers who have quit or have been fired may qualify for UC benefits after a waiting period in a few states.
workers’ wages. Generally, benefits are capped at a percentage of the average wage for workers in
the state, which generally lowers the average replacement rate for all worker to less than 50%
(47% in 2007). Weekly maximums in January 2008 ranged from $210 (Mississippi) to $600
(Massachusetts) and, in states that provide dependent’s allowances, up to $900 (Massachusetts).
In the third quarter of CY2008, the average weekly benefit was $292. Benefits are available for
up to 26 weeks (30 weeks in Massachusetts). The average regular UC benefit duration in third
quarter of CY2008 was 15.3 weeks. In FY2008, the ratio of unemployed workers who receive
benefits to all those who are unemployed ranges from a low of 0.19 (South Dakota) to a high of
Generally the recipiency rate of UC benefits rises during economic recessions (as workers with
strong labor market experience are laid-off) and falls during economic expansions (as new 3
entrants to the labor market begin to comprise a greater proportion of the unemployed).
The difficulty in monitoring job search intensity creates the risk the unemployed will abuse a
system designed to alleviate the worst of job loss. Although there are clear disincentives to
quickly find work in the UC system, this disincentive is balanced by a relatively low replacement
rate of wages by UC benefits and a recognition that proper allocation of human resources and 4
human capital requires adequate job search time.
The job-search behavior of the unemployed can be influenced by changing the timing, generosity,
and duration of UC benefits. Higher benefit levels and easier program requirements for benefits
will cause recipients to be less willing to accept jobs and may alleviate some of the social stigma 5
from being unemployed. Thus, the availability of benefits may create a disincentive to search for 6
and accept reemployment, increasing unemployment and unemployment duration.
The limited duration of UC benefits (generally 26 weeks) will result in some unemployed
individuals exhausting their UC benefits before finding work or voluntarily leaving the labor
force for other activities such as retirement, disability, family care, or education. Empirical
research suggests that workers who exhaust benefits search at similar or higher levels of intensity 7
as those workers who do find employment before benefit exhaustion. Most state UC programs
The percent of UC beneficiaries as compared to all unemployed workers is commonly referred to as the “recipiency
rate.” The exhaustion rate measures the proportion of all UC benefit recipients who exhaust their UC eligibility and do
not find a job within that period.
4 For a detailed survey of this disincentive effect, see Burtless, Gary. “Unemployment Insurance and Labor Supply: A
Survey.” In Unemployment Insurance, W. Lee Hansen and James Byers, eds. Madison: University of Wisconsin Press.
5 Burtless, Gary. “Unemployment Insurance and Labor Supply: A Survey.” In Unemployment Insurance, W. Lee
Hansen and James Byers, eds. Madison: University of Wisconsin Press.
6 See CRS Report RL32111, Unemployment Compensation (UC)/ Unemployment Insurance (UI): Trends and
Contributing Factors in UC Benefit Exhaustion, by Julie M. Whittaker.
7 Corson, Walter and Mark Dynarski. A Study of Unemployment Insurance Recipients and Exhaustees: Findings from a
National Survey. Unemployment Insurance Occasional Paper 90-3. U.S. Department of Labor Employment and
attempt to identify potential benefit exhaustees through a profiling system. Workers who are 8
identified as likely to become unemployed long-term are offered intensive employment services.
Figure 1 displays both the percent of UC beneficiaries as compared to all unemployed workers
(the “recipiency rate”) and as the number of UC benefit exhaustees since 1979. (Please note that
Figure 1 uses different numerical scales for the recipiency rate and for the exhaustion rate.
Because the correspondence between the two scales was determined by page size rather than by a
particular reason, readers should not place any significance in the two lines crossing each other.
The scale for the recipiency rate is located on the left-hand y-axis. The scale for the UC benefit
exhaustees is located on the right-hand y-axis.)
The proportion of UC recipients who exhaust their benefits varies according to economic
conditions, state benefit duration formulas, and the composition of the labor force. Some evidence
suggests that an aging workforce may have increased the proportion of unemployed workers who
were long-term unemployed; at the same time, this aging workforce may also have contributed to 9
the decrease in the overall unemployment rate.
Training Administration, 1990.
8 These services may include training on job search, job counseling, and funding for educational and skill-enhancing
9 For details on these trends, see CRS Report RL32757, Unemployment and Older Workers, by Julie M. Whittaker.
Figure 1. Economic Recessions, Percent of Regular UC Beneficiaries to All
Unemployed, and UC Benefit Exhaustees, January 1979- October 2008
40ed 400 ands
30 as Ced300tees
25arie pl 250 haus
ci nem x
15C B150r of
5rcen50NPercent of UC Beneficiaries to Total Unemployed
eRegular UC Exhaustees
Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Ja n - Ja n - Ja n - Ja n -
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: Congressional Research Service. Data are from Department of Labor, Employment and Training
The National Bureau of Economic Research (NBER)—not the federal government—declares 10
when a recession began. A recession is a significant decline in economic activity spread across
the economy, lasting more than a few months, normally visible in measures of real gross domestic 11
product (GDP), real income, employment, industrial production, and wholesale-retail sales. A
recession begins just after the economy reaches a peak of activity and ends as the economy
reaches its trough. Between a trough and a peak, the economy is in an expansion.
For a detailed explanation on the determination of recessions, see CRS Report RS22793, What is a Recession, Who
Decides When It Starts, and When Do They Decide?, by Brian W. Cashell.
11 The NBER explicitly states that it considers real GDP to be the single measure that comes closest to capturing what it
means by “aggregate economic activity.” Therefore, it places considerable weight on real GDP and other output
measures. Thus, the NBER takes into account employment but not unemployment or unemployment rates when
determining recessionary periods. The NBER’s approach is summarized at http://www.nber.org/cycles/recessions.html.
The NBER maintains a time line of the U.S. business cycle. This chronology identifies the dates
of peaks and troughs that frame economic recessions or expansions. According to NBER, a peak
was reached in December 2007, marking the end of the expansion that began in November 2001
and thus marking the beginning of the current recession.
The most recent expansion lasted 73 months; the previous expansion of the 1990s lasted 120
Since 1980 there have been five separate periods that the NBER has identified as recessions:
January 1980-July 1980; July 1981-November 1982; July 1990-March 1991; March 2001-
November 2001; and the ongoing December 2007 recession.
The Unemployment Compensation program’s two main objectives are to provide temporary and
partial wage replacement to involuntarily unemployed workers and to stabilize the economy 12
during recessions. These objectives are reflected in the current UC program’s funding and
benefit structure. When the economy grows, UC program revenue rises through increased tax
revenues while UC program spending falls as fewer workers are unemployed and receive
benefits. The effect of collecting more taxes while decreasing spending on benefits dampens
demand in the economy. This also creates a surplus of funds or a “cushion” of available funds for
the UC program to draw upon during a recession. In a recession, UC tax revenue falls and UC
program spending rises as more workers lose their jobs and receive UC benefits. The increased
amount of UC payments to unemployed workers dampens the economic effect of lost earnings by
injecting additional funds into the economy.
In response to economic recessions, the federal government sometimes has augmented the regular
UC benefit with both permanent (the EB program) and temporary extensions (including the
EUC08 program) of the duration of unemployment benefits.
The Extended Benefit program was established by the Federal-State Extended Unemployment
Compensation Act of 1970 (EUCA), P.L. 91-373 (26 U.S.C. 3304, note). EUCA may extend
receipt of unemployment benefits (extended benefits) at the state level if certain economic
See, for example, President Franklin Roosevelt’s remarks at the signing of the Social Security Act;
situations exist within the state. The Omnibus Budget Reconciliation Act of 1981, P.L. 97-35,
among other items, amended the EUCA to require that claimants work at least 20 weeks of full-
time insured employment or the equivalent in insured wages. The EB program is active in North
Carolina and Rhode Island. On December 7, 2008 the program will become active in Oregon.
The EB program is triggered when a state’s insured unemployment rate (IUR)13 or total 14
unemployment rate (TUR) reaches certain levels. All states must pay up to 13 weeks of EB if
the IUR for the previous 13 weeks is at least 5% and is 120% of the average of the rates for the
same 13-week period in each of the 2 previous years. There are two other optional thresholds that
states may choose. (States may chose one, two, or none.) If the state has chosen the option, they
would provide the following:
• Option 1: an additional 13 weeks of benefits if the state’s IUR is at least 6%,
regardless of previous years’ averages.
• Option 2: an additional 13 weeks of benefits if the state’s TUR is at least 6.5%
and is at least 110% of the state’s average TUR for the same 13-weeks in either
of the previous two years; an additional 20 weeks of benefits if the TUR is at
least 8% and is at least 110% of the state’s average TUR for the same 13-weeks
in either of the previous two years.
The EB program imposes additional restrictions on individual eligibility for benefits. It requires
that a worker be actively searching and available for work. Furthermore, the worker may not
receive benefits if the worker refused an offer of suitable work. Finally, claimants must have
recorded least 20 weeks of full-time insured employment or the equivalent in insured wages
during their base period.
States use one, two, or three different methods for determining an “equivalent” to 20 weeks of
full-time insured employment. These methods are described in both law (Section 202(a)(5) of the
EUCA) and regulation (20 CFR 615.4(b)). In practice, states that require any of these three
requirements for receipt of regular UC benefits and do not allow for exceptions to those
requirements do not need to establish that the worker met the 20 weeks full-time insured 15
employment. The three methods are listed below.
The IUR is substantially different than the TUR because it excludes several important groups: self-employed
workers, unpaid family workers, workers in certain not-for-profit organizations, and several other, primarily seasonal,
categories of workers. In addition to those unemployed workers whose last jobs were in the excluded employment, the
insured unemployed rate excludes the following: those who have exhausted their UC benefits; new entrants or
reentrants to the labor force; disqualified workers whose unemployment is considered to have resulted from their own
actions rather than from economic conditions; and, eligible unemployed persons who do not file for benefits.
14 The TUR is essentially a weekly version of the unemployment rate published by the Bureau of Labor Statistics: that
is, the ratio of the total number of unemployed persons divided by the total number of employed and unemployed
15 According to the 2008 Comparison of State Unemployment Insurance Laws the following states require at least one
of the “20 weeks” requirements for regular UC benefits: Alabama, Colorado, Connecticut, Florida, Georgia, Kentucky,
Louisiana, Michigan, Mississippi, Missouri, New York, North Dakota, Ohio, South Carolina, South Dakota, Tennessee,
• earnings in the base period equal to at least 1.5 times the high-quarter wages; or
• earnings in the base period of at least 40 times the most recent weekly benefit
amount, and if this alternative is adopted, it shall use the weekly benefit amount
(including dependents’ allowances) payable for a week of total unemployment
(before any reduction because of earnings, pensions or other requirements) that
applied to the most recent week of regular benefits; or
• earnings in the base period equal to at least 20 weeks of full-time insured
employment, and if this alternative is adopted, the term “full-time” shall have the
meaning provided by the state law.
The base period may be the regular base period or, if applicable in the state, the period may be the
alternative base period or the extended base period if that determined the regular UC benefit.
During some economic recessions, Congress has created federal temporary programs of extended
unemployment compensation. Congress acted eight times—in 1958, 1961, 1971, 1974, 1982,
1991, 2002, and 2008—to establish these temporary programs of extended UC benefits. These
programs extended the time an individual might claim UC benefits (ranging from an additional 6
to 33 weeks) and had expiration dates. Some extensions took into account state economic
conditions; many temporary programs considered the state’s total TUR or the state’s IUR or both.
Historically, these programs started operation after the trough of a recession had passed. This is
due to several reasons. One cause is that NBER often announces that a recession has begun three
or more months after what is later determined to be the official start. Another cause to this lag in
response time is that often the severity of the recession and its impact on unemployment levels
does not become apparent for several quarters after the recession begins.
The 1958 and the 1961 programs were proposed and enacted after the trough of those recessions
but before the unemployment rate had peaked. The 1971 program was enacted after the end of the
recession in November 1970. Both the 1974 and 1982 programs also became effective toward the
end of those recessions. The 1991 program was enacted eight months after the 1990-1991
recession trough but eight months before the unemployment rate peaked. Likewise, the 2002
program was enacted after the recession had ended but before the unemployment rate peaked. The
current Emergency Unemployment Compensation (EUC08) program of 2008 was enacted seven 16
months after the most recent recession began.
For a detailed description of the EUC08 program, see CRS Report RS22915, Temporary Extension of Unemployment
Benefits: Emergency Unemployment Compensation (EUC08), by Julie M. Whittaker.
Table A-1 located in the Appendix briefly summarizes these temporary programs17 as well as the
permanently authorized Extended Benefit (EB) program. The 1982 Federal Supplemental
Compensation Benefit (FSB) and 1991 Emergency Unemployment Compensation (EUC) had
extremely complicated—and changing—extended benefit triggers. Table A-2 and Table A-3 (also
located in the AppendixError! Reference source not found.) provide detailed information on
those benefit triggers for those two temporary programs. Table A-4 provides information on the
current Emergency Unemployment Compensation (EUC08) program benefits and triggers.
Recently, congressional and popular debate has examined the relative efficacy of expansion of
UC benefits and duration compared to other potential economic stimuli. In his January 22, 2008,
congressional testimony, the Director of the Congressional Budget Office (CBO) stated that
increasing the value or duration of UC benefits may be one of the more effective economic 18
stimulus plans. This is because many of the unemployed are severely cash constrained and 19
would be expected to rapidly spend any increase in benefits that they may receive. Mark Zandi
of Moody’s Economy.com has estimated multiplier effects for several different policy options, 20
including extending unemployment benefits (with multiplier effect of 1.64). The multiplier
estimates the increase in total spending in the economy that would result from a dollar spent on a
given policy option. Zandi does not explain how these multipliers were estimated, other than to
say that they were calculated using his firm’s macroeconomic model. Therefore, it is difficult to
offer a thorough analysis of the estimates.
Others point out that increasing either the value or length of UC benefits may, however, 21
discourage recipients from searching for work and from accepting less desirable jobs. A
The summary does not include P.L. 108-11, which created the special “TEUC-A” program. That temporary program
was in response to the unemployment of airline workers resulting from the September 11, 2001, terrorist attacks,
subsequent security measures, and the Iraq war. Signed into law on April 16, 2003, the program provided up to 39
weeks of extended benefits to individuals whose regular UC was based on qualifying employment with a certified air
carrier, at a facility in an airport, or with a producer or supplier of products or services for an air carrier. The program
had two tiers of benefits, known as TEUC-A and TEUC-AX and were authorized through the week ending before
December 29, 2003.
18 See CBO Testimony of Peter Orszag on Options for Responding to Short-Term Economic Weakness before the
Committee on Finance United States Senate on January 22, 2008; http://www.cbo.gov/ftpdocs/89xx/doc8932/01-22-
19 For another paper that takes this position, see the following: Elmendorf, Douglas W. and Jason Furman, If, When,
How: A Primer on Fiscal Stimulus, January 2008; available at http://www.brookings.edu/papers/2008/
20 Mark Zandi, “Washington Throws the Economy a Rope,” Dismal Scientist, Moody’s Economy.com, January 22,
21 For example, Shrek, James and Patrick Tyrell, Unemployment Insurance Does Not Stimulate the Economy,
Webmemo #1777, January 2008; http://www.heritage.org/Research/Economy/wm1777.cfm#_ftn1. See also Martin
Feldstein’s testimony before the Committee on Finance United States on January 24, 2008, in which he stated that
“[w]hile raising unemployment benefits or extending the duration of benefits beyond 26 weeks would help some
individuals ... it would also create undesirable incentives for individuals to delay returning to work. That would lower
earnings and total spending.” Available at http://www.senate.gov/~finance/hearings/testimony/2008test/
rationale for making any extension in unemployment benefits temporary would be to mitigate
disincentives to work, as the extension would expire once the economy improves and cyclical
A variety of measures are typically used to assess the state of the labor market.22 These measures
may include statistics that are absolute measures, such as employment and unemployment levels,
as well as relative measures, such as the insured unemployment rate and the total unemployment
A vigorous debate on how to determine when the federal government should intervene by
extending unemployment benefits has been active for decades. Generally, this debate has
examined the efficacy of using the IUR or TUR as triggers for extending unemployment benefits.
The debate also has examined whether the intervention should be at a national or state level.
Recently, serious consideration of other measures of the labor market has become increasingly
common. In particular, the increase in the number of unemployed from the previous year has
emerged in several proposals as a new trigger for a nationwide extension in unemployment
The Federal-State Extended Benefit Program, created by P.L. 91-373, originally assessed the
labor market through both insured and “total” unemployment rates and included both federal and 23
state level triggers for extended UC benefits. The EB’s federal trigger was eliminated by the
Omnibus Reconciliation Act of 1980 (P.L. 96-499). That act also required that the IUR measure
not include those who had exhausted benefits or who were receiving EB. This effectively made
the IUR statistic a less generous measure of unemployment.
Since the adoption of the permanent EB program in 1970, there has been considerable debate
concerning the relative merits of the IUR versus the TUR as an EB trigger. The IUR is defined as
the 13-week moving average of continuing regular UC claims divided by the average number of
individuals in UC-covered employment. This means that the IUR itself is an output of the UC
Because the calculation of the IUR is based upon the number of individuals currently receiving
UC benefits, each state’s IUR depends on various noneconomic factors, including state eligibility
For a detailed explanation of the more common employment measures, see CRS Report RL32642, Employment
Statistics: Differences and Similarities in Job-based and Person-based Employment and Unemployment Estimates, by
Julie M. Whittaker.
23 The federal trigger was an IUR of at least 4.5% for 3 consecutive months.
rules and administrative practices. Thus, the IUR is not a precise reflection of the health of a
In comparison, the TUR is defined as the number of all unemployed individuals actively seeking
work divided by the size of the civilian labor force. The TUR represents a larger population than
the IUR, because it counts as unemployed all those who are out of work and actively looking for
work, on layoff, or waiting to start a new job within 30 days.
A perennial question concerns the appropriate level at which to measure changes in
unemployment. Generally this debate has centered on the EB program and whether the EB trigger
should be based on national, regional, state or sub-state data. Recently, the debate on the EB
trigger has been expanded to ask what measure should be used if a new temporary extension of
UC benefits were to be enacted. In particular, should Congress act as it has in the most recent
recessions and create a nationwide extension of UC benefits with a nod to higher unemployment
states through an additional “high-unemployment” trigger? Or would it be more appropriate and a
better use of scarce resources to target only those states with current economic difficulties?
The argument in favor of a national trigger is that the definition of a recession is national in
scope, and the federal government’s interest in reversing an economic decline is national as well.
However, recessions have often been primarily regional in impact. Thus, a national trigger can
result in the payment of extended benefits to individuals in states that do not face unusually weak
There have also been proposals to create triggers on either a regional or a sub-state level. The
logic behind the sub-state or regional triggers is that they might improve the targeting of benefits
because state boundaries are often of little relevance to the workings of labor markets. There can
be considerable labor market differences between urban and rural areas within a state or among
urban areas within a state. Furthermore, some labor markets are located in more than one state. A
statewide trigger can deny benefits to areas facing severe labor market problems because other
regions of the state are not facing the same conditions. There are a variety of arguments against
regional and sub-state triggers. It would be difficult to define appropriate regional or sub-state
boundaries, and it is unclear whether these newly defined regions would be any less arbitrary than
current state boundaries. In addition, there are significant obstacles to be overcome in the
financing and administration of an EB program on the basis of regional or sub-state areas,
because the state has always been the operational unit for UC. There is also concern regarding the
accuracy and availability of regional or sub-state data and the costs of data improvements that 24
would be needed.
The Advisory Council on Unemployment Compensation advised against the use of substate or regional data in
determining the availability of extended benefits. Advisory Council on Unemployment Compensation, Collected
Findings and Recommendations: 1994-1996, 1996. p. 5.
Most recently, congressional debate has moved away from using the IUR or TUR as a trigger for
a national program. Serious consideration of other measures of the labor market has become
increasingly common. In particular, the increase in the number of unemployed from the previous
year has emerged in several proposals for new triggers in a nationwide extension in
H.R. 4934, the Emergency Unemployment Compensation Act of 2008, was introduced on
January 15, 2008. This bill would have extended UC benefits for up to 26 weeks whenever the
number of unemployed persons 16 years of age or older as compared to the same month of the
previous year exceeded one million individuals.
Table A-5, located in the Appendix, provides information on the timing of the recessions,
changes in unemployment of at least 1 million compared to same month in the previous year, and
federal enactment of the temporary extensions of benefits. During this period, the temporary
extensions of unemployment benefits take effect between 4 and 14 months after the onset of the
recession. The first changes in unemployment compared to the same month in the previous year
of at least 1 million occur between 3 and 5 months after the onset of the recession. Therefore, if
the use of the 1 million trigger had been applied in the past, the extension of UC benefits would
have been triggered between 8 to 12 months earlier than actually occurred.
Figure 2 provides a graphical presentation of the information that was summarized in Table A-4.
Figure 2 also includes data on the unemployment rate.
Please note that Figure 2 uses different numerical scales for changes in unemployment levels and
for the unemployment rate. Because the correspondence between the two scales was determined
by page size rather than by a particular reason, readers should not place any significance in the
two lines crossing each other. The scale for the changes in unemployment levels compared to
same month in the previous year is located on the left-hand y-axis. The scale for the
unemployment rate is located on the right-hand y-axis.
Figure 2. Recessions, Changes in Unemployment Compared to Same Month in Previous Year, Unemployment Rates, and
Temporary Federal Benefit Availability, January 1979-October 2008
Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in unemployment compared to same month in the previous year
from the Current Population Survey data, Bureau of Labor Statistics.
Beyond the IUR, TUR, and changes in the total number of unemployed, several other measures of
unemployment are often used in assessing the severity of employment conditions. These
measures include the number of unemployed workers who exhaust UC benefits and the number
of workers who have been unemployed for more than 26 weeks (the number of long-term
Figure 3 shows the change in the number of exhaustion of UC benefits. Figure 4 shows the
change in the number of workers who have been unemployed for more than 26 weeks. Generally,
both the changes in the numbers of exhaustees and the changes in the number of long-term
unemployed peak after the end of a recession.
Figure 3. Recessions, Changes in Regular UC Benefit Exhaustions as Compared to the Same Month in Previous Year, and
Unemployment Rates, January 1979- October 2008
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7 9 8 0 8 1 8 2 8 3 8 4 8 5 8 6 8 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8
Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in UC benefit exhaustion compared to same month in previous
year from the Employment and Training Administration, Department of Labor. Unemployment rate from the Current Population Survey data, Bureau of Labor Statistics,
Department of Labor.
Figure 4. Recessions, Changes in Long-Term Unemployment Compared to the same Month in Previous Year, and
Unemployment Rates, January 1979-October 2008
pl r e v e nt
m ont e m
g/w - m U
s.or -1000S a
httpange Long-term (27+ weeeks) Unemployment Change
J anJ an-J an-J an-J an-J anJ an-J an-J an-J an-J anJ an-J an-J an-J an-J anJ an-J an-J an-J an-J anJ an-J an-J an-J an-J anJ an-J an-J an-J an-
-7 9 8 0 8 1 8 2 8 3 -8 4 8 5 8 6 8 7 8 8 -8 9 9 0 9 1 9 2 9 3 -9 4 9 5 9 6 9 7 9 8 -9 9 0 0 0 1 0 2 0 3 -0 4 0 5 0 6 0 7 0 8
Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in long-term unemployment compared to same month in
previous year and unemployment rate from the Current Population Survey data, Bureau of Labor Statistics.
Table A-1. Summary of Extended Unemployment Compensation Programs
Program Public Law Dates Duration of Benefits Trigger Mechanism Financing Authority
Temporary P.L. 85-441 Reach back to 6/1957 Lesser of 50% of the None. Interest free loans to state
Unemployment 6/1958 to 6/1959 regular UC benefit accounts; if a state failed
Compensation (TUC) entitlement or 13 weeks. to repay loan by 1/1/63
the FUTA tax in the state
was raised to repay the
Temporary Extended P.L. 87-6 Reach back to 06/1960 Lesser of 50% of the None. FUTA funds.
Unemployment 04/1961 to 03/1962 regular UC benefit
Compensation (TEUC) entitlement or 13 weeks.
Federal-State Extended P.L. 91-373 Permanently Authorized Lesser of 50% of the National: 50% state SUTA funds.
iki/CRS-RL34340Benefits Act of 1970 (EB) (Amended several times. regular UC benefit IUR: seasonally adjusted 50% federal FUTA funds.
g/wSee also P.L. 96-499 and entitlement or 13 weeks. rate of at least 4.5% for 3
s.orP.L. 97-35 below.) consecutive months State:
leakIUR: at least 5% and 120%
://wikiof corresponding period in prior 2 years; or 6.0%; or
httpTUR: 6.5% and 110% of
either of 2 prior years.
Emergency Unemployment P.L. 92-224 and 1/1972 to 3/1973 Lesser of 50% of the National: Federal FUTA funds and
Compensation (Magnuson P.L. 92-329 regular UC benefit IUR: seasonally adjusted general revenue.
Act) entitlement or 13 weeks. rate of at least 4.5%
IUR: adjusted for
exhaustions of at least 4%
and 120% of prior 2 years
Federal Supplemental P.L. 93-572, 1/1975 to 1/1978 (Varied.) Provided up to National: Federal FUTA funds for
Benefits (FSB) P.L. 94-12, 26 weeks of benefits. IUR: seasonally adjusted benefits paid before
P.L. 94-45, and rate of at least 4.5% State: 4/1977; federal general revenue for benefits paid
P.L. 95-19 IUR: at least 5% and 120% on or after 4/1/1977.
prior 2 years; or 6.0%; or,
Program Public Law Dates Duration of Benefits Trigger Mechanism Financing Authority
TUR: 6.5% and 110% of
either of 2 prior years.
Amendments to Federal-P.L. 96-499 and P.L. 97-35 Permanently Authorized P.L. 96-499 tightened National EB trigger 50% state SUTA funds and
State Extended Benefits search and refusal of eliminated.
Act (EB) work requirements. State: 50% federal FUTA funds.
P.L. 97-35 eliminated the IUR: at least 5% and 120% prior 13-week period in
national trigger, the previous 2 years; or
removed EB recipients 6.0%; or,
from IUR calculations, TUR: 6.5% and 110% of
and required that either of 2 prior years.
claimant worked at
least 20 weeks recently.
Federal Supplemental P.L. 97-248, Reach back to 6/1982 Varied. See Table A-2. Varied. See Table A-2. Federal FUTA funds and
Compensation (FSC) P.L. 97-424, 9/1982-6/1985 general revenue.
iki/CRS-RL34340P.L. 98-21, P.L. 98-118,
g/wP.L. 98-135, and
leak(P.L. 99-272, some
://wikirecipients in Pennsylvania.)
Emergency Unemployment P.L. 102-164, Reach back to 2/1991 Varied. See Table A-3. Introduced “average” IUR, Federal FUTA funds for
Compensation (EUC) P.L. 102-182, 11/1991-4/1994 a 13-week comparison benefits paid before
[Note: Supersedes rather measure. 7/5/1992 and after
P.L. 102-244, P.L. 102-318, than supplements the EB 10/2/1993; with certain
P.L. 103-6, and program. Governors had the option of triggering Varied. See Table A-3. exceptions, federal general revenue for benefits paid
P.L. 103-152 “off” EB benefits.] on or after 7/5/1992 but
Temporary Extended P.L. 107-147, Reach back to 3/2001 TEUC: Up to 13 weeks. TEUC was available Federal FUTA funds.
Unemployment P.L. 108-1, and 3/2002-3/2004 High unemployment states nationally.
Compensation P.L. 108-26 (TEUC-X); up to an TEUC-X was determined
additional 13 weeks. by state level: if the EB
(TEUC, TEUC-X) program was triggered on;
or if the EB program
would have been triggered
Program Public Law Dates Duration of Benefits Trigger Mechanism Financing Authority
on if section 203(d) of the
Compensation Act of 1970
were amended to read
IUR: at least 4% and 120%
of the prior 2 years.
Emergency Unemployment P.L. 110-252 and Reach back to 5/2007 Varied. See Table A-4. EUC08 is nationally Federal FUTA funds.
Compensation of 2008 P.L. 110-449 7/6/2008-3/28/2009 available
(EUC08) High Unemployment Tier
II EUC08 is determined at
the state level: if the state
TUR is at least 6% or if the
state IUR is at least 4%.
iki/CRS-RL34340Table A-2. Details: Federal Supplemental Compensation (FSC) Benefits
s.orPublic Law Benefit Tiers Dates in Effect (first claim date)
://wikiTax Equity and Fiscal Responsibility Act (P.L. 97-248), signed 9/2/1982. 10 weeks: EB activated in state after 6/1/1982 8 weeks: EB inactive in state; IUR at least 3.5% 9/12/1982-1/8/1983.
http6 weeks: all other states.
Surface Transportation Act of 1982 (P.L. 97-424), signed 16 weeks: IUR of 6% or higher 1/9/1983-3/31/1983.
1/6/1983. 14 weeks: EB activated on or after 6/1/1983 but IUR
12 weeks: IUR at least 4.5%
10 weeks: IUR at least 3.5% but less than 4.5%
8 weeks: all other states
Social Security Amendments of 1983 (P.L. 98-21), signed First FSC payments on 4/1/1983 or later: 4/1/1983-10/18/1983.
4/20/1983. 14 weeks: IUR of 6% or higher
12 weeks: IUR of at least 5% but less than 6%
10 weeks: IUR of at least 4% but less than 5%
8 weeks: All other states
Additional entitlements for FSC recipients before
10 weeks: IUR at least 6%
Public Law Benefit Tiers Dates in Effect (first claim date)
8 weeks: IUR at least 4% but less than 6%
6 weeks: all other states
Federal Supplemental Compensation Amendments of FSC first payments on 10/19/1983 or later: 10/19/1983-3/31/1985.
1983 (P.L. 98-135), signed 10/24/1983. 14 weeks: IUR of 6% or higher (No benefits past 6/1985).
12 weeks: IUR of at least 5% but less than 6%
10 weeks: IUR of at least 4% but less than 5%
8 weeks: all other states
Additional entitlements for FSC recipients after 3/31/1983
but before 10/19/1983
5 weeks: if all remaining benefits are for weeks before
4 weeks: IUR of at least 5%
2 weeks: all other states
iki/CRS-RL34340Table A-3. Details: Emergency Unemployment Compensation (EUC) Benefits of 1991
g/wPublic Law Benefit Tiers Dates in Effect (first claim date)
leakEmergency Unemployment Compensation Act (P.L. 102-20 weeks: States with TUR of 9.5% or higher or IUR of Superseded by P.L. 102-182.
164), signed 11/15/1991. 5% or higher.
://wiki13 weeks: States with IUR of 4% or higher or IUR of
http2.5% or higher and UC exhaustion rate of 29% or higher. 6 weeks: All other states.
Termination of Application of Title IV of the Trade Act Claims filed before 6/14/1992 11/17/1991-7/3/1992.
of 1974 to Czechoslovakia and Hungary (P.L. 102-182), 33 weeks: States with TUR of 9% or higher or IUR of 5%
signed 12/4/1991; and Emergency Unemployment or higher.
Benefits Extension (P.L. 102-244), signed 2/7/1992. 26 weeks: All other states.
Claims filed on or after 6/14/1992
20 weeks: States with TUR of 9% or higher or IUR of 5%
13 weeks: All other states.
[Note: P.L. 102-182 authorized benefit periods of 20 and
13 weeks; P.L. 102-244 authorized an additional 13
weeks for each tier.]
Unemployment Compensation Amendments of 1992 26 weeks: States with TUR of 9% or higher or IUR of 5% 6/14/1992-3/6/1993.
(P.L. 102-318), signed 7/3/1992. or higher
20 weeks: All other states.
[Note: If national TUR fell below 7.0% benefits were to
be phased down. This condition was not met.]
Emergency Unemployment Compensation Amendments Claims filed before 9/12/1993 3/7/1993-10/2/1993.
of 1993 (P.L. 103-6), signed 3/4/1993. 26 weeks: states with TUR of 9% or higher or IUR of 5%
20 weeks: all other states
Claims filed on or after 9/12/1993 (triggered by national
TUR falling below 7% for 2 consecutive months)
15 weeks: States with TUR of 9% or higher or IUR of 5%
10 weeks: All other states.
Unemployment Compensation Amendments of 1993 13 weeks: States with TUR of 9% or higher or IUR of 5% 10/3/1993-2/5/1994
(P.L. 103-152), signed 11/25/1993 or higher. (No benefits past 4/30/1994)
iki/CRS-RL343407 weeks: All other states.
g/w[Note: This law also made permanent changes to the EB program to make its benefits more widely available after
s.orthe expiration of EUC.]
Table A-4. Details: Emergency Unemployment Compensation (EUC08) Benefits of 2008
Public Law Benefit Tiers Dates in Effect (first claim date)
Supplemental Appropriations Act of 2008, Title IV 13 weeks: all states 7/6/2008-3/29/2009
Emergency Unemployment Compensation (P.L. 110-(No benefits past 7/4/2009)
252), signed June 30, 2008
Unemployment Compensation Extension Act of 2008, 33 weeks: states with TUR of 6% or higher or IUR of 4% 11/23/2008-3/29/2009
(P.L. 110-449), signed November 21, 2008. or higher (No benefits past 8/29/2009)
20 weeks: all other states
Table A-5. Timing of Recessions, Changes in Unemployment of at Least One Million Unemployed Compared to
Same Month in Previous Year, and Extended Unemployment Benefits, 1990-2008
1980 Recession 1981-1982 Recession 1990-1991 Recession 2001 Recession 2007 Recession
No Months Months Months P.L. 107-Months P.L. 110-Months
Temporary after P.L. 97-after P.L. 102-after 147, after 252, after
Federal Recession 248, FSC Recession 164, EUC Recession TEUC Recession EUC08 Recession
Extension Begins Benefits Begins Benefits Begins Benefits Begins Benefits Begins
Date began March December
January 1980 — July 1981 — July 1990 — 2001 — 2007 —
First change in
at least 1 million
same month in November November August March
previous year April 1980 3 months 1981 4 months 1990 4 months 2001 5 months 2008 3 months
iki/CRS-RL34340Congress first August August February
g/wenacts extension Nonea NA 1982 13 months 1991 13 months 2002 11 months June 2008 6 months
leakProgram becomes September November March
active None NA 1982 14 months 1991b,c 16 months 2002 12 months July 2008 7 months
httpEnd recession November March November To be determined
July 1980 6 months 1982 16 months 1991 8 months 2001 8 months (TBD) —
Last change of at
least 1 million September September
unemployed March 1981 14 months April 1983 21 months 1992 17 months 2002 20 months TBD —
Last benefits Scheduled:
claimed August Scheduled:
NA NA June 1985 47 months April 1994 44 months April 2004 37 months 2009 18 months
Source: CRS. Timing of recessions from National Economic Bureau of Research http://www.nber.org/cycles.html. Estimated increases of 1 million unemployed use data
from the Current Population Survey, Bureau of Labor Statistics; http://www.bls.gov/data/home.htm.
a. The individual eligibility for the federal-state EB program was tightened by P.L. 96-499. The federal EB trigger was eliminated and the calculation of IUR was altered to
be less generous by P.L. 97-35.
b. H.R. 3201 was passed on 8/2/1991; the President signed the bill (P.L. 102-107) but did not declare an emergency; thus, no benefits were available. Congress sent S.
1722 to the President who vetoed it on 10/1/1991. For a statement on the reasons for the veto, see http://www.presidency.ucsb.edu/ws/index.php?pid=20097.
c. Although P.L. 102-164 was signed into law on November 15, 1991, it was immediately superseded by 2 other laws: P.L. 102-182, signed 12/4/1991, and P.L. 102-244,
signed 2/7/1992. P.L. 102-182 authorized benefit periods of 20 and 13 weeks depending on state economic conditions; P.L. 102-244 authorized an additional 13 weeks
for each tier.
Julie M. Whittaker
Specialist in Income Security