During and after the Great Recession, public policy tried to help the large numbers of long-term unemployed workers by expanding unemployment insurance (UI). Unemployment insurance benefit payments increased rapidly, in part because more workers applied for and remained collecting UI benefits. Congress passed many extensions of Emergency Unemployment Compensation (EUC08) starting in June 2008 and continuing through December of this year. Congress also enacted a special federally funded Extended Benefit program and a Federal Additional Benefit program that added $25 per week to every UI check.
Note: The sum of individual UI programs may not add up to the total for all UI programs because of rounding.
Taken together, the recessionary benefits programs listed above added to the UI expenditures between 2008 and 2011. By contrast, workforce programs received a one-time appropriation of only $5.5 billion from the American Recovery and Reinvestment Act of 2009. Thus, over 30 times more was spent supplementing UI benefits than boosting reemployment and training services.
During recessions, countries make decisions about the labor market responses they choose to alleviate unemployment. Strategies can be categorized into “active” and “passive” policies. UI is considered a passive program, while programs that provide reemployment services and training are considered active because they help workers return to productive employment. The Organization for Economic Cooperation and Development advocates that industrial nations emphasize active labor market policies as much as possible during recessionary times. By favoring unemployment insurance benefits over training and reemployment, the United States clearly emphasized passive labor market policies during the Great Recession.