Is the Unemployment Insurance System a Safety Net for Welfare Recipients Who Exit Welfare for Work

摘要

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) transformed the old welfare system to one that provides temporary support and includes strong incentives for participants to work. Under the old welfare law, recipients who left welfare for work could return to welfare fairly easily if they lost their jobs in an economic slowdown. However, the time limits imposed under the new law constrain former recipients ability to return to welfare if they lose their jobs. Under the reforms, former recipients may have to increasingly rely on the Unemployment Insurance (UI) program as their temporary safety net in case of job loss. There is some concern that UI may not be a viable option for many welfare recipients who find jobs, because they typically find low-wage, entry-level jobs in which they experience high job turnover. However, with welfare reform and the strong economic conditions of the mid to late 1990s, it is possible that a greater number of recipients who leave welfare for work are potentially eligible for UI now than have been in the past. As fears of an economic slowdown grow, it is critical to examine the extent to which UI is an option for those who have left welfare for work under a time-limited welfare system. This paper provides important evidence on the extent to which recent recipients who left welfare for work are eligible for UI.