Publication Date



Policy Paper No. 2022-027




Unemployment insurance (UI) is a joint federal-state program that pays temporary partial earnings replacement to involuntarily unemployed workers while they seek reemployment. During the COVID-19 pandemic, UI claims surged and became a primary source for income replacement for workers who lost their jobs. However, despite previous federal incentives for states to shore up their UI funding reserves, the scale of claims during the pandemic was unprecedented, and the federal government needed to step in to help pay not only for direct, expanded benefits but for additional assistance to states themselves. Although this effort helped backstop the successful operation of states’ UI programs, it continued the trend of the federal government paying for an increasing share of benefits during crises, and weakening incentives for state UI systems to be independent and self-financing.

Issue Date

May 2022


Upjohn project #43000

Subject Areas

UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Unemployment insurance; Benefit financing




O'Leary, Christopher J. and Kenneth J. Kline. 2022. "How Federal Pandemic Relief Helped Replenish State Unemployment Reserves." Policy Paper No. 2022-027. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.