Unemployment Insurance as a Potential Safety Net for TANF Leavers: Evidence from Five States. B. Potential Duration and Potential Maximum Benefits

09/01/2004

In addition to computing the amount of benefits that claimants can receive, states must also determine the duration of benefits. Because the UI program provides partial and temporary wage replacement for people who have lost jobs, the potential duration of benefits generally is limited, usually to no more than 26 weeks. A few states follow a uniform-duration rule for all workers; all eligible claimants receive benefits for a uniform amount of time, most typically 26 weeks. Most states have a variable-duration rule, where duration is determined in one of two ways. Some states first establish a maximum benefit level as a fraction of the base-period earnings, which, in conjunction with weekly benefits, can be used to compute duration. Other states use an average weekly wage method and set potential benefits as a fraction of the weeks worked during the base period. Three of the five study states (Illinois, Maryland, and Pennsylvania) essentially have a uniform-duration rule.(5)

  • The average potential duration of UI benefits ranged from 18 to 26 weeks.

The average potential duration of benefits for former TANF recipients in the three of the five study sites with a uniform-duration rule was essentially 26 weeks (Figure IV.1). Average duration was somewhat lower in the remaining two sites (Phoenix and Tarrant County). Potential duration in those two sites remained basically unchanged during the first few quarters after TANF exit and then, as former recipients gained work experience and increased their earnings during the base period, increased somewhat to about 22 weeks in Phoenix and to 18 weeks in Tarrant County. Tarrant County’s former TANF recipients had particularly low durations, as the formula used to calculate the proportion of base-period weeks is set at 27 percent in Texas, compared with 33 percent in most other states in this study.

Figure IV.1.
Potential Duration of Benefits, at Quarter 8 after TANF Exit, among Those Potentially Monetarily Eligible for UI during
Figure IV.1 Potential Duration of Benefits, at Quarter 8 after Tanf Exit, among Those Potentially Monetarily Eligible for UI during
Source: Calculations from administrative records from selected Welfare-to-Work evaluation study sites, and state UI program rules, assembled by Mathematica Policy Research, Inc.

(a): Philadelphia has two uniform Potential durations(15 weeks or 26 weeks). A small fraction in our sample had 10 weeks of Potential duration.

Table IV.4.
Distribution of Maximum Cumulative Benefit amounts at Quarter 8 after TANF Entry among Those Who Exited TANF for Work and Potentially Had UI Monetary Eligibility During Quarter 8
  Phoenix,
AZ
Cook Co.,
IL
Baltimore
Co., MD
Philadelphia,
PA
Tarrant Co.,
TX
Percentage with MBA of:

Less than $2,000

17 14 9 9 31

$2,001 to $3,000

19 20 11 13 19

$3,001 to $4,000

17 21 10 18 17

$4,001 to $5,000

15 18 15 19 13

$5,001 to $6,000

32 12 12 15 9

$6,001 to $7,000

7 12 12 4

More than $7,000

9 31 16 7

(Average amount)

($3,710) ($4,018) ($5,176) ($4,856) ($3,133)
Sample Size 1,740 8,472 681 6,989 784
Source: Calculations from administrative records from selected Welfare-to-Work evaluation states, and state UI program rules, assembled by Mathematica Policy Research, Inc.

MBA = maximum benefit amount

  • The increases in the weekly benefit amounts over time (combined with the increases in potential duration in certain sites) led to fairly large increases in the potential maximum cumulative benefits over time.

There was considerable variation across the study sites with respect to the potential maximum cumulative amount of benefits for which claimants would be eligible. For instance, on average, at the eighth quarter after TANF exit, potential maximum cumulative benefit amounts ranged from slightly more than $3,000 in Tarrant County to more than $5,000 in Baltimore County (Table IV.4). Additionally, the potential maximum cumulative benefits amounts for which claimants would be eligible increased over time, as former TANF recipients gained work experience and accumulated higher earnings (Table IV.5).

Table IV.5.
Average Maximum Potential Cumulative Benefit Amounts, by Quarter after TANF Exit
  Phoenix,
AZ
Cook Co.,
IL
Baltimore
Co., MD
Philadelphia,
PA
Tarrant Co.,
TX
Quarter After TANF Exit

0

$2,781 $2,885 $4,384 $3,113 $2,064

1

2,538 3,003 4,464 3,217 1,983

2

2,609 3,195 4,424 3,705 2,156

3

2,775 3,389 4,387 4,075 2,468

4

3,176 3,544 4,421 4,265 2,831

5

3,475 3,690 4,606 4,460 3,091

6

3,614 3,841 4,852 4,641 3,232

7

3,671 3,948 5,062 4,752 3,303

8

3,710 4,018 5,176 4,856 3,374
Sample Size(a) 1,229-2,365 6,549-11,543 454-801 3,694-8,403 545-1,029
Source: Calculations from administrative records from selected Welfare-to-Work evaluation states, and state UI program rules, assembled by Mathematica Policy Research, Inc.

Note: Sample includes those who left TANF for work and were monetarily eligible for UI during the quarter.

(a): Sample size ranges represent the minimum and the maximum sample sizes for which the averages of MBA were computed during the period.

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