The cornerstone of an unemployed worker's income support is the joint federal-state 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% under permanent law) 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. The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 , as amended) temporarily provided for 100% federal funding of EB from February 22, 2009, through December 31, 2013. 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 or other good cause 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 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 up to 50% of workers' wages. Generally, the maximum benefit amount is capped (often half of the average wage in the state or less), which lowered the average national replacement rate to 33% of the average weekly wage in the first quarter of 2014. Maximum weekly benefit amounts in January 2014 ranged from $133 (Puerto Rico) to $679 (Massachusetts) and, in states that provide dependents' allowances, up to $1,019 (Massachusetts). In June 2014, the average weekly benefit was $314. Benefits are available for up to 26 weeks in most states (30 weeks in Massachusetts; 28 weeks in Montana; eight other states have maximum durations that are fewer than 26 weeks). The average regular UC benefit duration in June 2014 was 16.6 weeks, with less than half (43%) of all beneficiaries exhausting their regular benefits. In June 2014, approximately 2.4 million unemployed workers received regular state UC benefits in a given week. In 2013, on average, 26% of all U.S. unemployed workers received regular state unemployment benefits (when all extended unemployment benefits were included, that percentage increased to 40%). Generally, the UC recipiency rate (the ratio of unemployed receiving UC benefits to all unemployed) rises during economic recessions (as workers with strong labor market experience are laid off) and falls during economic expansions (as new 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 financial aspects of job loss. Although most economists would agree that UC benefits create some disincentives to find work quickly, these disincentives are somewhat balanced by a relatively low replacement rate of wages by UC benefits and a recognition that proper allocation of human resources and 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 from being unemployed. The availability of benefits may create a disincentive to search for and accept reemployment, increasing unemployment and unemployment duration. Economic research has suggested that this disincentive effect is relatively small and not a particularly large contributor to the high unemployment rates found during economic recessions. 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 reasons such as retirement, disability, family care, or education. Empirical research suggests that workers who exhaust benefits search at similar or higher levels of intensity as workers who find employment before benefit exhaustion. All state programs attempt to identify potential benefit exhaustees through a state-specific profiling system. Workers who are identified as likely to become unemployed long term may be offered intensive employment services. Figure 1 displays UC beneficiaries as the monthly rate of UC benefit exhaustees since 1979 and as a percentage of all unemployed workers (the "recipiency rate"). 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 work force may have increased the proportion of unemployed workers who are long-term unemployed; at the same time, this aging work force may also have contributed to the decrease in the overall unemployment rate. The National Bureau of Economic Research (NBER)—not the federal government—declares 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 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. 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 the NBER, a peak was reached in December 2007, marking the end of the expansion that began in November 2001 and the beginning of the recession that ended in June 2009. 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 December 2007-June 2009. The UC program's two main objectives are to provide temporary and partial wage replacement to involuntarily unemployed workers and to stabilize the economy 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 because 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 or "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 Extended Benefit program) and temporary extensions (including the Emergency Unemployment Compensation of 2008 program) of the duration of unemployment benefits. The Extended Benefit (EB) 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 (EB) at the state level if certain economic 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 have worked at least 20 weeks of full-time insured employment or the equivalent in insured wages. The EB program is triggered when a state's insured unemployment rate (IUR) or total 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 choose one, two, or neither of the additional options.) If the state has chosen the option, it 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 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 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 he or she refused an offer of suitable work.