EXECUTIVE OFFICE OF THE PRESIDENT

COUNCIL OF ECONOMIC ADVISERS

THE ECONOMIC IMPACT OF RECENT TEMPORARY 

UNEMPLOYMENT INSURANCE EXTENSIONS

DECEMBER 2, 2010
THE ECONOMIC IMPACT OF RECENT TEMPORARY UNEMPLOYMENT INSURANCE 

EXTENSIONS

EXECUTIVE SUMMARY

Unemployment insurance (UI) provides a safety net for workers who have lost a job through 

no fault of their own, as long as they continue to search for new employment. During normal 

economic conditions, firms pay into state insurance systems that replace roughly half of the 

average individual’s lost earnings, up to 26 weeks. However, the federal government historically 

funds additional weeks of benefits in response to an economic downturn. The benefits allow 

recipients to continue to support their families while searching for their next job. 

In response to the recession that began in December 2007, Congress expanded UI benefits by 

creating Emergency Unemployment Compensation (EUC) and 100 percent federal funding of 

Extended Benefits (EB). These programs provide UI benefits after a worker exhausts state 

benefits, helping when it takes longer to find a job, such as in this severe downturn. These 

extensions began to expire on November 30, 2010. In this report, the Council of Economic 

Advisers (CEA) examines the effects of the extensions thus far and the potential impact on the 

economy if Congress fails to act soon to continue these emergency measures.

As a result of these emergency expansions to UI:

• EUC and EB have helped 14 million unemployed workers as of October 2010. As of that 

date, there were almost 5 million unemployed workers benefiting from these programs 

each week.

• In total, these programs have benefited about 40 million people who have received, or 

lived with a recipient of, EUC or EB. This total includes 10.5 million children. 

If these measures are not extended, the maximum eligibility for benefits in most states will

revert to the pre-recessionary level of 26 weeks. The Department of Labor estimates that, 

relative to a month-long extension, 2 million unemployed workers will lose coverage in 

December 2010. And, relative to a year-long extension, nearly 7 million unemployed workers in

total will lose coverage by November 2011. 

Further, EUC and EB make up a substantial portion of household income. Without EUC and 

EB, the typical household receiving these benefits will see their income fall by a third. In the 42 

percent of households where the EUC or EB recipient is the sole wage-earner, 90 percent of 

income will be lost. 
This important income replacement allows individuals that have suffered from job loss to

avoid a dramatic drop in their spending levels. Research studies have documented that UI is an 

extremely effective form of support for the economy relative to other government programs, both 

in terms of bang-for-the-buck and timeliness. EUC and EB recipients spend their benefit checks, 

rather than saving them, and a drop in this income will translate into a sizeable drop in aggregate 

spending. 

Specifically, CEA estimates that:

• Employment was about 800,000 higher, and the level of GDP 0.8 percent higher, in 

September 2010 than would have been the case without EUC and EB. 

• Without an extension, employment would be about 600,000 lower, and GDP 0.6 percent 

lower, in December 2011 than if a year-long extension were passed.

Previously, Congress continued federal expansions of UI until the economy was much 

further along the road to recovery. With 10 consecutive months of private sector job growth and 

half a percentage point drop in the unemployment rate since its peak, the economy is beginning 

to recover. However, the unemployment rate remains unacceptably high and there are still 5 job 

seekers for every job opening. For the last half-century, Congress has consistently extended UI 

benefits when economic circumstances substantially increased the difficulty of finding a job. 

Given the current labor market conditions, failing to continue UI extensions now would be 

unprecedented.
1

I. INTRODUCTION

As a form of insurance against job loss, employers pay taxes into state government 

unemployment systems at rates based, in part, on past usage of the system. State governments 

then provide weekly payments of $300, on average, to workers who have lost a job through no 

fault of their own, replacing roughly half of an individual’s lost earnings.1

 Typically, 

unemployed workers can receive up to 26 weeks of benefits, as long as they continue to search 

for work. In an economy with normal labor demand, one would expect most unemployed 

workers to find a job within this time frame. However, in December 2007 the United States

began to slide into a deep recession. By October 2009, the unemployment rate was 10.1 percent, 

and there were more than 6 jobs seekers for every job opening, compared to just 1.5 prior to the 

recession. 

Recognizing that unemployed workers would have a significantly harder time finding jobs, 

Congress created Emergency Unemployment Compensation 2008 (EUC) in June of that year. 

This swift action put unemployment benefits in place much earlier than has been done in 

previous recessions – almost one year before GDP stopped declining. These early efforts by 

Congress resulted in UI playing a greater role in stabilizing the economy, as suggested in a 

recent Department of Labor report.2

As the labor market worsened, Congress further extended and expanded the program,

particularly for unemployed workers in the hardest-hit states. As part of the American Recovery 

and Reinvestment Act, Congress provided for 100 percent federal funding of Extended Benefits 

(EB), a program usually funded jointly by the state and federal governments. Individuals are 

eligible for EB once they exhaust their EUC benefits if their state meets certain unemploymentbased triggers. All told, an unemployed worker could receive up to 99 weeks of coverage in 

those states with the highest rates of unemployment. (See the Appendix for more detail on these 

programs.)

Importantly, the current tiered structure of EUC and EB allows for a natural phasing down of 

coverage as economic conditions improve. Many of the eligible weeks of benefits are 

determined at the state level by thresholds based on states’ unemployment rates; the maximum 

length of coverage provided by these federal programs is shorter in states with better economies. 

Beyond this natural phase down, however, the legislation authorizing these programs began to 

expire on November 30, 2010 and the millions of Americans receiving coverage through these

programs have already begun losing benefits. 

 1 Estimates are from the Department of Labor, Employment and Training Administration.

2 A report commissioned by the Department of Labor (Vroman 2010) found unemployment insurance – both the 

regular state program and emergency federal programs – reduced the fall in GDP by 18 percent.
2

In this report, the Council of Economic Advisers (CEA) analyzes what the impact of the 

EUC and EB has been on the recipients and their families, as well as on the economy as a whole. 

In addition, the report examines the consequences of not extending these benefits. 

II. WHO HAS BEEN HELPED BY THE FEDERAL UI EXTENSIONS?

Figure 1 shows the total number of EUC and EB recipients over time, since the start of the 

programs. By the end of 2008, 2.5 million unemployed workers had received EUC or EB. As

the recession deepened, more and more unemployed workers who were unable to find jobs by 

the time they exhausted their 26 weeks of regular UI benefits moved into these programs. As of 

October 2010, 14 million people had received benefits from these UI extensions at some point. 

(See Appendix Table 2 for a breakdown of EUC and EB recipients by state.) 

Currently, almost 5 million of the 6 million long-term unemployed receive EUC or EB.3

 3 Some have chosen not to apply or are ineligible, and some have exceeded the limit of benefits in their state.

 On 

average, unemployed workers receive benefits equal to roughly half of their lost wages. While 

EUC and EB payments go directly to workers, their families benefit from the income support as 

well. Figure 2 shows the importance of these benefits to the household income of recipients. 

The bars show the share of a household’s income that EUC and EB represent by the type of 

household. In the typical household receiving EUC or EB, these programs make up a third of all 

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10

Recipients (cumulative)

Figure 1: Recipients of UI Extensions (Cumulative)

14 million as of 

October 2010

Source:Department of Labor (Employment and Training Administration) data
3

income. However, for the 42 percent of EUC and EB recipients who are the sole wage-earners 

in their household, benefits make up 90 percent of household income.4

 

While 14 million people had received EUC or EB through October 2010, CEA estimates that 

an additional 26 million people living in their households benefited indirectly. Figure 3

illustrates the beneficiaries of these programs across different types of households. Importantly, 

approximately 42 percent of all EUC and EB recipients have, or live with, children. As of 

October 2010, 10.5 million children had benefited from EUC or EB through a household 

member. Further, 3 million of these children were in households where the UI recipient was the 

sole wage-earner. In total, about 40 million people had benefited from EUC or EB through at 

least one household member.

 4 Included in this 42 percent are 3 percent of recipient households where there are two EUC or EB recipients 

contributing to income, and no other wage earners.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Total Sole wage-earners 

with children

Sole wage-earners 

without children

Multiple earners with 

children

Multiple earners 

without children

Share

Figure 2: Share of Household Income from EUC and EB, by Household Type

Source: CEA calculations from Current Population Survey, March 2010 Supplement
4

Source: CEA calculations from Current Population Survey, March 2010 Supplement

As the large number of beneficiaries makes clear, the EUC and EB programs have helped a 

wide range of American households, mostly the middle class. While households receiving EUC 

and EB are distributed across all household income levels, middle-class households make up 

two-thirds of the recipients.5

III. HOW DO EUC AND EB EXTENSIONS AFFECT THE MACROECONOMY?

In addition to providing income insurance for families, UI can also help the short-run 

performance of the economy as a whole.6

 5 Middle class is defined as households with annual incomes in 2009 that were between $20,000 and $100,000, or 60 

percent of all households.

 The drop in economic activity that marks a recession 

6 See Auerbach and Feenberg (2000).

14,000,000

15,500,000

3,000,000

7,500,000

Figure 3: The 40 Million Beneficiaries of EUC and EB, as of October 2010

Children living with 

a recipient, multiple

wage-earners

Children living 

with a 

recipient; 

recipient is sole 

wage-earner 

EUC/EB 

recipients

Other adults living 

with a recipient
5

typically leads to job loss, which results in a significant decline in income and therefore 

consumption for workers and their families. This job loss has a snowball effect as the reduction 

in spending by families experiencing job loss means further loss of demand for businesses, 

leading to further unemployment. UI can mitigate this cycle by helping unemployed workers 

avoid precipitous drops in spending. Economic research has found that without UI, a typical 

family whose head of household becomes unemployed would spend 22 percent less on food – as 

compared to the 7 percent drop that is actually observed because of the UI system.7 In addition, 

unemployment is a leading cause of mortgage defaults, and the income provided by UI helps 

avert foreclosures.8

Moreover, the Congressional Budget Office notes that UI extensions are “both timely and 

cost-effective in spurring economic activity and employment.”9

 The evidence suggests that the 

additional spending from UI happens very soon after the federal cost is incurred. In contrast, 

many other job creation measures have significantly longer lags between the federal cost and the 

economic benefit.

CEA’s analysis of the effect of the UI extensions on the U.S. economy shows a significant 

increase in GDP and a higher level of employment due to the aggregate demand the benefits

sustain.10 Specifically, as of September 2010,

11 CEA estimates that EUC and EB have:

• Increased the level of employment by 793,000 jobs,12 and

• Increased the level of GDP by 0.8 percent.13

(Appendix Table 2 includes a breakdown of jobs supported by state.) 

 7 See Gruber (1997). Other research, including Browning and Crossley (2001), also finds strong consumption 

smoothing effects of UI.

8 See Foote et al. (2009).

9 The Congressional Budget Office (2010) ranks extensions of unemployment benefits as the most effective policy 

for generating short-term growth. 10 The analysis is based on methodology used in prior CEA analyses (e.g. CEA 2009) and uses similar multipliers as 

those used in outside analyses of UI, including Zandi (2010).

11 Due to data limitations, these estimates are only available through September 2010. 12 This measures the impact on the level of employment at a point in time. Given the ongoing nature of the program, 

the jobs last for an extended amount of time. The number of job-years created or saved by the program through 

September 2010 is estimated to be 893,000. In addition, since the demand generated by benefits paid out in recent 

quarters will support the economy over the next year, the total job-years created or saved by spending through 

November 2010 is estimated to be 1.4 million by the end of 2011. 13 Vroman (2010) discusses the economic impact of the UI program during the recent recession. The report had 

similar findings, showing that employment was 714,000 higher on average each quarter because of the federal 

unemployment expansions. The report also shows that regular state UI resulted in employment being 891,000 

higher, for a total of 1.6 million jobs higher on average in each quarter of the expansions. 
6

Finally, the actual cost of these programs to the government is likely below the official

outlays for two reasons. First, because the programs support hundreds of thousands of jobs and 

increase economic activity significantly, they also generate partially-offsetting tax revenue 

through income, payroll, and sales taxes. Second, without the income support from UI, many 

families would need to draw on other programs such as the Supplemental Nutrition Assistance 

Program (SNAP, formerly known as food stamps) or Social Security Disability Insurance (DI).14 

Some argue that these UI extensions have led to an increase in the unemployment rate, 

worrying that UI provides a disincentive to search for work. However, such disincentive effects 

estimated by economists have typically been small.

15 Further, the literature suggests that the 

effect of UI on job search behavior is likely even smaller in recessions.16 As an example, 

researchers at the Federal Reserve Bank of San Francisco find that workers who are eligible for 

unemployment insurance during the current recession are finding jobs at a nearly identical rate to 

those who are ineligible.17 

In short, as a form of insurance, the expanded UI programs are intended to provide income 

support for workers and their families during periods of job loss, but they have substantial 

benefits to the broader economy as well. Because of these benefits, the net cost to the federal 

government is likely to be less than the official cost score of the UI programs.

18

IV. THE IMPACT OF LETTING UI EXTENSIONS EXPIRE

As described above (and in full detail in the Appendix), on November 30, 2010, the EUC and 

EB programs began to expire.

19 And, the total number of people exhausting their benefits will 

ramp up, as more recipients reach the end date of their program or current tier of EUC. 

Figure 4 illustrates the number of exhaustees under current law (red line) and under one 

possible alternative, a year-long extension (blue line). Even in the case of an extension, some 

unemployed workers will lose coverage as they exhaust the benefits available to them under the 

current program. However, a far greater number will exhaust their benefits if there is no 

extension, so the red line increases much more steeply.

 14 Unemployment benefits are included in the income calculation used to determine SNAP eligibility. Therefore, 

without UI, more families would be eligible to receive SNAP. Further, Autor and Duggan (2006) document that 

when unemployment increases so does the number of individuals who apply for and receive DI. They make the 

point that, by providing a substitute, UI may reduce enrollment in DI. They also document that the average DI 

enrollee stays in the program for many years and ends up costing the federal government over $240,000.

15 See Katz (2010) and Card and Levine (2000). 16 See Kroft and Notowidigdo (2010) and Schmieder, von Wachter, and Bender (2010). 17 See Valletta and Kuang (2010). 18 The Congressional Budget Office (2008) also noted this effect in its cost analysis of the Emergency Extended 

Unemployment Compensation Act of 2008, the first extension that Congress passed.

19 EUC expired on November 30, 2010, while 100 percent federally funding of EB expired on December 1, 2010.
7

As can be seen in Figure 4, the impact of failing to extend EUC and EB is both quick and 

substantial: 

• Under current law, 2 million people will exhaust benefits in December 2010, relative to 

an extension. 

• By November 2011, 6.7 million people total will exhaust benefits, relative to an 

extension.

If EUC and EB are not extended, there will be repercussions for the overall economy as well. 

Figure 5 depicts the employment impact of EUC and EB under current law and under a one-year 

extension.20 The solid blue line shows the impact on employment of the UI extensions through 

September 2010. The dashed blue line shows the impact on employment if the program is 

extended, continuing to support aggregate demand as unemployed workers do not experience 

dramatic declines in spending levels. The dashed red line shows the impact if there is no 

extension.

 20 Because the model that the CEA uses to forecast employment and GDP is designed to give end-of-quarter 

estimates, the reported estimates are technically through December 2011.

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Nov-11

No extension (current law)

Extension (one year)

Exhaustees (cumulative)

Figure 4

Looking Forward: Exhaustees With and Without an Extension (Cumulative)

Source: Department of Labor estimates

Difference 

of 6.7 

million 
8

As Figure 5 shows, not extending EUC and EB would have a significant negative effect on 

the immediate macroeconomic conditions. For example, CEA estimates that in December 2011, 

without a year-long extension:

• Employment would be 593,000 lower than if there were an extension;

21 and 

• GDP would be 0.6 percent lower than if there were an extension.

22 

(See Appendix Table 3 for a breakdown of projected impacts by state.)

 21 As explained above, the analysis describes the number of workers employed at a point in time due to the program. 

These jobs last over time, generating a significant number of job-years. If there is an extension, the overall EUC and 

EB programs will save or create roughly 2.3 million job-years, almost all by the end of 2012. Roughly 730,000 of 

these job-years are due to the proposed year-long extension. 22 These estimates are consistent with outside estimates, including the Economic Policy Institute (2010), the Center 

for Budget and Policy Priorities (2010), and the Joint Economic Committee (2010), which use slightly different 

techniques. Both the JEC and CBPP use estimates from the CBO for the number of years of full time equivalent 

employment generated by various types of spending. These estimates include both the impact on the number of jobs 

and the lengthening of the work week for some employees. In addition, these estimates measure both the jobs and 

the length of time the jobs exist, similar to the “job-year” concept discussed in the footnote above. The CEA 

estimate of 730,000 job-years generated by the extension is more conservative than the CBPP and JEC estimate of 

over 1 million years of full time equivalent employment generated by the extension.

0

+100,000

+200,000

+300,000

+400,000

+500,000

+600,000

+700,000

+800,000

+900,000

Sep-08 Mar-09 Oct-09 Apr-10 Nov-10 May-11 Dec-11

Jobs

Figure 5: Estimated Impact of UI Extensions on Employment

No extension (current law)

Extension 

(one year)

Source: CEA and Department of Labor estimates. Dashed lines indicate projections.

593,000 

fewer jobs
9

V. HOW WOULD AN ADDITIONAL EXTENSION COMPARE TO THOSE IN PREVIOUS 

RECESSIONS?

Congress has provided federal UI benefits in response to every recession since 1957.23 The 

number of additional weeks allotted and the time period covered has varied, although in recent 

history, federal benefits have been extended to last 2 to 3 years after the end date of the 

recession. For example, the benefits passed under President Reagan lasted until June 1985, over 

2.5 years beyond the official end date of the 1981-82 recession. At that time, the economy had 

already made a sizeable recovery from its trough (GDP had grown 16 percent), and the 

unemployment rate had fallen below 7.5 percent.

Congress stepped in to help those workers who lost their jobs in this most recent recession in 

a similar fashion. At the time EUC was created in June 2008, 1.6 million workers, or nearly onein-five job seekers, had been unemployed for longer than 26 weeks. This response by Congress 

was much faster than in previous recessions due to the speed with which the economy was 

weakening. By the time further increases in the number of weeks of benefits available in the 

hardest hit states were added in November 2009, the number of long-term unemployed had risen 

to 5.9 million. 

While the labor market has shown signs of improvement, it is far from fully recovered. As of 

October 2010, the unemployment rate stood at 9.6 percent and 6 million workers, or 42 percent 

of job seekers, were long-term unemployed and the average duration of unemployment was 34 

weeks. According to the most recent data, there are still 5 job seekers per job opening (versus 

1.5 pre-recession) and the probability that an unemployed worker finds a job in any given month 

is under 20 percent. For the long-term unemployed, the monthly job-finding rate is closer to 12 

percent. The current state of the U.S. labor market is substantially weaker than when prior 

extensions of UI were ended. 

VI. CONCLUSION

Congress created EUC and provided 100 percent federal funding of EB in order to deliver 

critical income support to individuals and their families as well as to the economy during this 

severe economic downturn. These extensions have helped 14 million unemployed workers to 

date. In total, about 40 million people live in households where at least one member has 

received EUC or EB. However, if the recent federal benefits are not extended, 2 million 

 23 The only exception is the short recession during 1980, which was followed by a deeper recession beginning in 

July 1981. Congress passed an extension to UI in August 1982, probably in response to the effects of both 

recessions.
10

unemployed workers will lose coverage in December and a total of almost 7 million will lose 

coverage by November 2011 in comparison to a year-long extension.

Allowing these extensions to expire now will reduce the income of the typical affected 

household by approximately one-third during a time when the job market is still not recovered. 

With less income, spending will fall, and this will translate into about 600,000 fewer jobs and 0.6 

percent lower GDP in December 2011, relative to an extension. 

The U.S. economy has made important strides in the last year. Since the employment trough 

in December 2009, there have been 10 consecutive months of private sector job growth and 

private sector employment has risen by more than one million jobs. However, the 

unemployment rate remains unacceptably high and there are still 5 job seekers for every job 

opening. For the last half-century, Congress has consistently extended UI benefits when 

economic circumstances were serious enough to make finding a job difficult. Given the current 

labor market conditions, failing to continue UI extensions now would be unprecedented.
11

REFERENCES

Auerbach, Alan and Daniel Feenberg. “The Significance of Federal Taxes as Automatic 

Stabilizers.” Journal of Economic Perspectives, Vol. 14, No. 3, Summer 2000, pages 37-56.

Autor, David H. and Mark G. Duggan. “The Growth in the Social Security Disability Rolls: A 

Fiscal Crisis Unfolding.” Journal of Economic Perspectives, Vol. 20, No. 3, Summer 2006. 

Browning, Martin and Thomas F. Crossley. “Unemployment Insurance Benefit Levels and 

Consumption Changes.” Journal of Public Economics, Vol. 80, No. 1, April 2001, pages 1-

23.

Card, David and Phillip Levine. “Extended Benefits and the Duration of UI Spells: Evidence 

from the New Jersey Extended Benefit Program.” Journal of Public Economics, Vol. 78, 

October 2000, pages 107-38.

Center for Budget and Policy Priorities. “Emergency Unemployment Insurance Benefits Remain 

Critical for the Economy.” November 10, 2010.

Congressional Budget Office. Cost Estimate for H.R. 5749. April 2008.

Congressional Budget Office. “Policies for Increasing Economic Growth and Employment in 

the Short Term.” Testimony by Douglas W. Elmendorf, Director. Prepared for the Joint 

Economic Committee of the United States Congress. February 23, 2010.

Council of Economic Advisers. “The Economic Impact of the American Recovery and 

Reinvestment Act of 2009, First Quarterly Report.” September 2009.

Economic Policy Institute. “A Good Deal for All.” Issue Brief #288. November 4, 2010.

Foote, Christopher L., Kristopher S. Gerardi, Lorenz Goette, and Paul S. Willen. “Reducing 

Foreclosures.” Federal Reserve Bank of Boston working paper, April 2009.

Gruber, Jonathan. “The Consumption Smoothing Benefits of Unemployment Insurance.” 

American Economic Review, Vol. 87, March 1997, pages 192-205. 

Joint Economic Committee. “Extending the Federal Unemployment Insurance Benefits 

Program: Critical to Keeping the Economic Recovery on Track.” November 2010.

Katz, Lawrence. “Long-Term Unemployment in the Great Recession.” Testimony for the Joint 

Economic Committee, April 29, 2010.

Kroft, Kory and Matthew Notowidigdo. “Should Unemployment Insurance Vary with the Local 

Unemployment Rate? Theory and Evidence.” Working paper, October 2010.

Schmieder, Johannes, Till von Wachter, and Stefan Bender. “The Effects of Extended 

Unemployment Insurance Over the Business Cycle: Evidence from Regression 

Discontinuity Estimates over Twenty Years.” Working paper, October 2010.

Valletta, Rob and Katherine Kuang. “Extended Unemployment and UI Benefits.” Federal 

Reserve Bank of San Francisco Economic Letter. April 19, 2010.
12

Vroman, Mark. “The Role of Unemployment Insurance as an Automatic Stabilizer During a 

Recession.” IMPAQ International and the Urban Institute, July 2010. Commissioned by the 

U.S. Department of Labor.

Zandi, Mark. “Using Unemployment Insurance to Help Americans Get Back to Work: Creating 

Opportunities and Overcoming Challenges.” Testimony for the Senate Finance Committee, 

April 14, 2010.
13

APPENDIX I

HOW DO REGULAR UNEMPLOYMENT INSURANCE AND THE FEDERAL EXTENSIONS WORK?

Unemployment insurance is available to workers who lose their jobs through no fault of 

their own. Employers provide a form of insurance against job loss by paying taxes into state 

government unemployment systems at rates based, in part, on past usage of the system. State 

governments then provide weekly payments of $300, on average, replacing a little under half of a 

worker’s lost earnings. Unemployed workers can receive up to 26 weeks of benefits, as long as 

they continue to search for work. In an economy with normal labor demand, one would expect 

most unemployed workers to find a job within this time frame. 

In response to the recession that began in December 2007, Congress created the federal 

Emergency Unemployment Compensation 2008 program (EUC) in June of that year. At that 

time, EUC provided 13 weeks of federally-financed additional compensation to eligible 

individuals in all states. As the labor market worsened, Congress extended the 13 weeks to 20, 

and added 3 more “tiers” of EUC which unemployed workers move through sequentially until 

they find a job or decide to stop searching and drop out of the labor force. The first two tiers, 

providing a combined 34 weeks of additional coverage, are available in every state. The next 

two tiers, adding a total of 19 weeks, are available based on state unemployment rates. 

Congress also provided for 100 percent federal funding of Extended Benefits (EB), a 

program for which individuals are eligible once they exhaust their EUC benefits. EB can add up 

to 20 weeks of coverage following EUC. All told, an unemployed worker could receive up to 99 

weeks of coverage in those states with the highest rates of unemployment. EB is a permanent 

joint federal-state program that is triggered by state-level economic conditions. Many states 

passed less-restrictive triggers that are contingent on the current 100 percent federal EB 

funding.24 In the permanent EB program, state governments split the monetary burden with the 

federal government. When 100 percent federal funding expires, most states will automatically 

revert back to the higher triggers within a few weeks, and EB will cease to be available to their 

claimants. 

Importantly, the structure of EUC and EB allows for a natural phasing down of coverage as 

economic conditions improve. Since tiers 3 and 4 of EUC as well as EB are determined by 

thresholds based on the state-level unemployment rate, the maximum length of coverage is 

shorter in states with better economies. 

 24 In most states, to qualify for EB, the unemployment rate must be above the trigger value shown in Appendix 

Table 1 and be higher than it was in the corresponding period of either of the past two years.
14

Based on current law, these existing extensions began to phase out on November 30, 

2010. This means that recipients who are receiving federally funded benefits (i.e., EUC or EB) 

will remain eligible for their current tier but will no longer be eligible for subsequent tiers.25 The 

majority of workers who currently receive regular unemployment insurance and those that 

become unemployed in the future will not receive additional benefits once they exhaust their first 

26 weeks of coverage. While EB may continue to be available in some states, in which workers 

would be eligible after finishing their 26 week regular programs, without 100 percent federal 

funding most states will likely trigger off EB as well.

 25 EB shuts off completely within one or two weeks after federal funding expires, while EUC claimants are allowed 

to finish out their tiers before losing benefits.

Appendix Table 1: Details of Unemployment Insurance Coverage

Program Length (weeks) Eligibility

State UI 26 all

Tier 1 20 all

Tier 2 14 all

Tier 31 13 state unemployment 

rate > 6%

Tier 42 6 state unemployment 

rate > 8.5%

Option 1 13 state unemployment 

rate > 6.5%

Option 2 20 state unemployment 

rate > 8%

EUC

EB3

3. States are either in option1 or option 2 (or neither), recipients do not 

move sequentially through each option. States must also have a law in 

place which triggers on EB under these conditions. As of November 

2010, EB is triggered on in 35 states, the District of Columbia, and Puerto 

Rico.

1. As of November 2010, tier 3 is triggered on in 45 states, the District

 of Columbia, Puerto Rico, and the Virgin Islands.

2. As of November 2010, tier 4 is triggered on in 25 states, the District

of Columbia, and Puerto Rico.
15

State

Alabama 159,745 5,254

Alaska 24,999 1,377

Arizona 232,065 10,027

Arkansas 105,460 4,844

California 1,752,892 115,948

Colorado 194,831 11,756

Connecticut 183,139 14,053

Delaware 36,941 1,748

District of Columbia 29,523 2,429

Florida 945,639 43,392

Georgia 502,963 21,598

Hawaii 37,737 2,790

Idaho 64,484 3,069

Illinois 618,130 41,515

Indiana 369,641 19,804

Iowa 130,122 4,958

Kansas 133,148 5,157

Kentucky 93,742 9,723

Louisiana 93,434 2,989

Maine 42,660 1,977

Maryland 220,727 8,628

Massachusetts 401,623 24,959

Michigan 620,210 41,639

Minnesota 261,294 13,281

Mississippi 98,154 3,202

Missouri 220,338 9,997

Montana 48,458 1,377

Nebraska 56,104 1,645

Nevada 184,386 11,356

New Hampshire 37,429 1,662

New Jersey 592,840 51,063

New Mexico 54,744 3,083

New York 870,771 55,203

North Carolina 624,890 27,964

North Dakota 12,935 332

Ohio 531,044 29,506

Oklahoma 95,340 4,650

Oregon 224,422 14,208

Pennsylvania 968,517 47,195

Puerto Rico 26,090 4,211

Rhode Island 55,548 4,223

South Carolina 242,551 9,853

South Dakota 6,515 208

Tennessee 259,460 10,581

Texas 621,452 36,389

Utah 76,971 3,781

Vermont 21,167 1,135

Virgin Islands 3,821 181

Virginia 194,365 8,014

Washington 262,352 21,096

West Virginia 51,379 2,264

Wisconsin 243,929 15,016

Wyoming 17,210 692

Total 13,958,331 793,000

Source: CEA and Department of Labor estimates

Appendix Table 2: Past Impact of EUC and EB by State

Estimated impact

of EUC/EB on

employment in

September 2010

Total EUC/EB

recipients through

October 2010
16

State

Alabama 77,946 6,876

Alaska 13,535 1,194

Arizona 127,560 11,253

Arkansas 32,861 2,899

California 1,013,384 89,399

Colorado 100,471 8,863

Connecticut 79,065 6,975

Delaware 17,251 1,522

District of Columbia 11,631 1,026

Florida 531,029 46,846

Georgia 301,688 26,614

Hawaii 14,454 1,275

Idaho 25,622 2,260

Illinois 286,102 25,239

Indiana 131,625 11,612

Iowa 34,119 3,010

Kansas 38,166 3,367

Kentucky 81,005 7,146

Louisiana 39,083 3,448

Maine 18,485 1,631

Maryland 65,061 5,740

Massachusetts 177,795 15,685

Michigan 299,590 26,429

Minnesota 103,032 9,089

Mississippi 87,389 7,709

Missouri 60,500 5,337

Montana 11,752 1,037

Nebraska 14,313 1,263

Nevada 83,139 7,334

New Hampshire 12,627 1,114

New Jersey 321,774 28,386

New Mexico 32,861 2,899

New York 459,075 40,499

North Carolina 232,285 20,492

North Dakota 2,225 196

Ohio 238,320 21,024

Oklahoma 38,011 3,353

Oregon 113,978 10,055

Pennsylvania 353,989 31,228

Puerto Rico 84,976 7,496

Rhode Island 24,369 2,150

South Carolina 95,173 8,396

South Dakota 2,215 195

Tennessee 94,977 8,379

Texas 334,410 29,501

Utah 27,794 2,452

Vermont 4,900 432

Virgin Islands 412 36

Virginia 59,637 5,261

Washington 158,563 13,988

West Virginia 18,982 1,675

Wisconsin 126,565 11,165

Wyoming 6,232 550

Total 6,722,000 593,000

Source: CEA and Department of Labor estimates

1

Relative to a year-long extension

Estimated fewer 

number of jobs in 

December 2011 

under current law

People losing

coverage by

November 2011

under current law

Appendix Table 3: Projected Future Impact of Current Law1