Those Hit Hard by Great Recession Struggle to Recover Years Later

Two New Studies Shed Light on Experiences of the Unemployed
Feb 07, 2017

The unemployment insurance (UI) system is designed to temporarily ease the burden of unemployment while workers look for new jobs. In a study for the Department of Labor, however, Mathematica researchers found that many of the UI recipients who collected all of their benefits (over one-quarter of all beneficiaries) still faced significant challenges four to six years later. This research, along with another recently released Mathematica study, sheds light on the experiences of UI recipients after the Great Recession, which began in 2007.

In the recession’s aftermath, unemployment rates peaked at about 10 percent, and the average length of unemployment was almost twice as high as it had been at any other point since World War II. In response, Congress extended UI benefits to a maximum of 99 weeks for eligible recipients (up to 73 weeks longer than usual). These benefits helped many people manage joblessness, but some still struggled to recover after the extended assistance period.

Comparison of employment rates 46 years after unemployment benefit claim

Employment exhuastees

In comparison with people who did not use all their available UI benefits, people who exhausted benefits that began between January 2008 and September 2009 were much less likely to have jobs four to six years later and more likely to have left the labor force for reasons such as disability, retirement, or stopping the job search. They also experienced greater losses in household income and had higher rates of participation in other government assistance programs, such as the Supplemental Nutrition Assistance Program.

Read the full report, “Exhaustees of Extended Unemployment Benefits Programs: Coping with the Aftermath of the Great Recession.

In a related study for the Department of Labor, Mathematica researchers used longitudinal data to investigate how UI recipients changed the way they looked for jobs and coped with financial hardships during a six- to nine-month period after they began receiving benefits.

Learn more about the findings in the report, “A Longitudinal Survey of Unemployment Insurance Recipients in Two Regions in California.


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