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Ending Emergency Benefits and the Impact on Idaho’s Unemployment Rate

Will ending emergency unemployment compensation impact Idaho’s unemployment rate?

Extended benefits for about 2,500 Idahoans ended Dec. 31. And while there will be a measureable impact on Idaho’s economy of 2,500 claimants losing extended benefits – around $600,000 a week – it will have little impact on the state’s official unemployment rate, which measures people actively looking for work, or the rate that includes people who are discouraged or working only part time because they cannot find full-time jobs.

Whether someone is receiving benefits or even eligible for benefits is not a consideration when calculating Idaho’s or the national unemployment rate, which is based on public responses to the monthly Current Population Survey. People receiving extended benefits are already included in both measures and will continue to be factored in as unemployed, as long as they continue actively seeking work.

Where the expiration of benefits could indirectly impact the rate are discouraged and involuntary part-time workers – if enough claimants change their job search behavior now that extended benefits have ended. For example:

People receiving extended benefits are included in the basic unemployment rate and a broader rate that includes discouraged and involuntary part-time workers. If these people are receiving extended benefits, they are presumably unemployed, available for work and actively seeking work – criteria to be considered as unemployed and necessary for collecting benefits. These people will remain in these measures if they continue to look for work now that extended benefits have expired.

If a job seeker stops looking for work once extended benefits expire because they believe there are no jobs available even if they want to work, that individual is still included in the broader measure of unemployment as a discouraged worker. If they are available to work but not currently looking for work for reasons beyond discouragement, they are considered as a marginally attached worker and is still included in that broader measure. In both instances, the basic unemployment rate could decline.

If extended benefits have expired and the job seeker can only find a part-time job despite wanting full-time work, they are considered as working  “part time for economic reasons,” or involuntarily part time, and still included in the broader measure of unemployment.

If a person stops looking for work and no longer wants to work once unemployment benefits expire, they are considered to have left the labor force and are not included in any unemployment rate calculation. This group includes retirees, students and homemakers. Their departure from the labor force could reduce both the basic and broader unemployment rates.

Bob Uhlenkott, chief research officer
Bob.Uhlenkott@labor.idaho.gov

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Regional economist Will Jenson recently explained the various levels of unemployment, who gets counted and what these various rates mean in a recent Idaho Employment article called Alternative Measures of the Unemployment Rate.