Unemployment Insurance and Economic Impact Payments Associated with Reduced Hardship Following CARES Act

Brief

Unemployment Insurance and Economic Impact Payments Associated with Reduced Hardship Following CARES Act

Abstract

In this brief, we examine how material hardship and worries about meeting basic needs changed after implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which expanded eligibility and benefits for unemployment insurance (UI) and authorized one-time economic impact payments to most US households to mitigate the negative economic effects of the COVID-19 pandemic. To do so, we use new longitudinal data from the first wave of the Urban Institute’s Coronavirus Tracking Survey, fielded May 14 through 27, 2020, and Urban’s Health Reform Monitoring Survey, fielded March 25 through April 10, 2020. 

We compared changes in material hardship and worrying about meeting basic needs between late March/early April and mid-to-late May among two groups of adults: (1) those whose families received UI in the 30 days before the May survey and (2) those whose families had applied for UI since March 1 but did not receive benefits in the 30 days before the May survey. We also compared such changes among all UI applicants (both recipients and nonrecipients) who got the economic impact payments as of May and applicants who did not get the payments. We find the following changes between March/April and May:

  • Food insecurity declined among UI recipients, and medical hardship increased among adults whose families applied for UI but had not received benefits as of May.
    • Among adults whose families lost work or work-related income because of the pandemic and received UI benefits in the 30 days before the May survey, the share reporting food insecurity declined from 27.1 percent in March/April to 24.1 percent in May. In contrast, there was no decline in food insecurity among adults whose families applied for UI but did not receive benefits as of May. Those adults also reported an increase in unmet needs for medical care because of costs during this period, from 25.4 percent to 34.2 percent.
  • Worrying about meeting basic needs in the next month declined for UI recipients.
    • Between March/April and May, the share of UI recipients worried about paying for five essential expenses (food, rent/mortgage, utility bills, debts, and medical costs) decreased between 6.2 to 17.1 percentage points. We did not find statistically significant declines in worrying about meeting basic needs among adults whose families applied for UI but did not receive benefits as of May.
  • Among UI applicants, UI receipt was associated with a 3.7 percentage-point reduction in problems paying utility bills, a 7.3 percentage-point reduction in unmet medical needs because of costs, and reductions of 8.6 to 15.1 percentage points in worrying about meeting basic needs.

Among UI applicants, economic impact payments were associated with a 13.3 percentage-point reduction in food insecurity and a 7.8 percentage-point reduction in problems paying utility bills, but they did not change how much people worried about meeting basic needs in the next month.

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