Highlights from Urban Institute's unemployment and recovery project
The first in a two-part introduction to the Urban Institute's Unemployment and Recovery Project. Tomorrow: who has access to unemployment insurance - and more importantly, who doesn't?
Although the Great Recession technically ended in June 2009, the U.S. labor market has struggled to bounce back. Three years into the recovery, the unemployment rate remains over 8 percent, down from its 2009 peak of 10 percent but far higher than the 5 percent rate at the recession’s onset in December 2007. Further, fewer than 64 percent of American adults are participating in the labor force (working or looking for work). The U.S. labor force participation rate has not been that low since 1982.
The Urban Institute’s Unemployment and Recovery Project (U&R) strives to provide timely and insightful information to policymakers and the public as they grapple with persistently high unemployment and the challenges it poses for the future of the U.S. economy and the social safety net. The project was created in early 2011 with major support from the Ford and Rockefeller foundations, as well as from the Annie E. Casey Foundation, the Russell Sage Foundation, and the Center for Community Change. This multifaceted project assesses unemployment’s impacts on various population groups, especially the most vulnerable; monitors job creation and the recovery by sector, population group, and labor market; gauges how effectively current government policies buffer unemployment’s financial consequences and address the workforce development needs of workers and employers; and recommends the policy changes needed to minimize suffering and dislocation and increase the economy’s long-term potential in this recovery and in the years to come.
Over the past 18 months, a host of studies, policy briefs, and factsheets has been produced under the U&R project. All of them are available through the U&R and Urban Institute websites. Major highlights include:
- Older workers, women, and those with more education are less likely to become unemployed than other workers, but once they become unemployed, they are disproportionately more likely to experience long-term unemployment. In addition, older workers, women, and unmarried adults without children have made up increasingly larger shares of the long-term unemployed since the recession’s end.
- The financial impact of the 2007–2009 recession will reverberate into retirement for many working families, even for those who did not lose their jobs. For those age 55 to 59 in 2008, the Great Recession will reduce average age-70 incomes by 5 percent.
- Among those experiencing unemployment, receipt of unemployment benefits doubled between 2005 and 2009. Enrollment in the Supplemental Nutritional Assistance Program (formerly known as food stamps) also increased. Temporary Assistance for Needy Families, the nation’s cash assistance program for poor families with children, did not play much of a countercyclical role during the recession.
- The unemployment insurance system leaves many disadvantaged workers behind. Less than 36 percent of unemployed workers with labor market disadvantages (e.g., single parents, non-whites, those with low educations, and those under age 25) collected benefits in 2010 compared with 69 percent of non-disadvantaged workers.
- The majority of states (36) have had to borrow money to meet the demand for unemployment benefits, securing record loan amounts to maintain benefit payments during 2009-2011. To reduce those debts and make their unemployment insurance systems solvent, states have resorted to both tax increases and benefit reductions. To date, however, policy actions at the state and federal levels have not adequately addressed the problem.
Over the next year, look for new U&R research on:
- recommendations for reforming the financing of the unemployment insurance system;
- the public workforce development system’s response to the Great Recession;
- the divergent employment gains of native-born and immigrant workers during the recovery; and
- reports on who has left the labor force and why.