UI Trust Fund Solvency: Analysis from 1979–2010

Abstract

The federal–state unemployment insurance (UI) program provides temporary assistance to unemployed workers by replacing a portion of lost wages. States maintain reserves, funded through employer taxes, in trust funds, out of which they pay UI benefits. However, the severity and length of the recent recession, and the slow pace of recovery, have placed a heavy demand on state UI trust funds, and the large majority of states have needed loans from the federal government to continue to pay benefits. Continued high unemployment has put the UI program in historically poor financial condition.