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Monday, November 29, 2021 at 11:15am to 12:45pmVirtual Event
Daphné Skandalis, University of Copenhagen
Racial Inequality in the U.S. Unemployment Insurance System
(joint with Maxim Massenkoff and Ioana Marinescu)
Abstract: In the U.S., Black workers receive less unemployment insurance (UI) when they lose their jobs than White workers. Why is that, and how could it be addressed? In this paper, we use administrative data from random audits on UI claims to build a novel representative sample of UI claimants in all U.S. states, with precise information on claimants' work history. We show that relative to White claimants, Black claimants receive a 17.7% (6.3 ppt) lower replacement rate. One reason is that Black claimants do worse in work history variables---such as base period earnings---used to determine UI rights. But we show that even with the same work history, Black claimants re- ceive a 7.4% (2.6 ppt) lower replacement rate than White claimants. What explains this conditional gap? We show that it is entirely caused by the design of the UI system: the rules determining the rights to UI are less generous in states with larger Black populations. We conclude that, while entirely closing the racial UI gap would require eliminating racial disparities in the labor market, the gap could already be substantially decreased by harmonizing state UI rules.
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