Quick Hit Micah Maidenberg Thursday November 18th, 2010, 12:52pm

The Economic Benefits Of Unemployment Insurance

Providing unemployment insurance to those who've been thrown out of work by the worst recession in decades is a moral no-brainer. But unemployment benefits also provide a tremendous boost to struggling economies, according to a multi-year study (PDF) the U.S. Department of Labor released on Tuesday.

The study details several eye-popping findings about unemployment insurance. At the height of the Great Recession (which is technically over, according to economists), unemployment insurance averted 1.8 million job losses. During each quarter of the Great Recession, jobless benefits kept an average of 1.6 million Americans working. That's in part because for every $1 spent on unemployment insurance, economic activity increases by $2. In all, unemployment insurance kept the country's gross domestic product $315 billion higher from the start of the recession through earlier this year, the study says.

It's not clear if an extension of jobless benefits to the hardest hit workers -- including 127,000 people in Illinois -- will be forthcoming from Congress in the current lame duck session. The Department of Labor's study should give federal lawmakers all the justification they need to make that happen.


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