Unemployment Insurance Eligibility, Replacement and Takeup Rates across the U.S.

Unemployment insurance (UI) is the key source of government transfers for the newly unemployed. Weekly UI benefit payments may be laid-off workers’ only source of income while they search for a new job. Though many social assistance programs, like the Supplemental Nutrition Assistance Program or Social Security, are primarily implemented by the federal government, UI programs are run by individual states.

As we discussed in a previous blog post, which used a dataset of digitized state-level and time-varying UI laws, this creates large differences in eligibility requirements and maximum weekly UI benefit payments, depending on where individuals live and when they lose their jobs. In this blog post, we take the analysis a step further, using real-world data to show how such variations in UI rules between states affect UI eligibility, replacement and takeup rates.

To do so, we use two sources of data. The first, the Survey of Income and Program Participation (SIPP), is a nationally representative microdata survey administered by the U.S. Census Bureau that provides information on income, employment, government program participation and demographics. The second is the dataset of state-level UI laws over time described in our previous blog post.For an even deeper look at this methodology, see the January 2026 revision of Serdar Birinci and Kurt See’s Federal Reserve Bank of St. Louis working paper, “The Implications of Labor Market Heterogeneity for Unemployment Insurance Design.”

Using these two data sources, we can identify whether people are eligible for UI benefits at the time of their unemployment, whether they choose to participate in a UI program conditional on their eligibility, and how much they receive from the state as a percentage of their previous employment earnings.

Eligibility and Replacement Rates Differ across States

The figure below shows the average eligibility rate (i.e., the fraction of UI-eligible unemployed among all unemployed) across states. We obtain these averages by taking the mean of monthly rates from 1996 to 2016 separately for each state. States are grouped into quintiles by eligibility rate; darker colors mean more unemployed workers are eligible for UI.

Share of Unemployed Workers Eligible for UI by State

SOURCE: Birinci and See (2026).

We note several important findings. First, the average eligibility rate differs greatly across states. In Alaska, for example, only 30.5% of laid-off workers are eligible for unemployment benefits, while in New Hampshire 70.3% of workers are eligible upon job loss. This is unsurprising given the large differences between states’ earnings requirements. In 2016, the minimum earnings required in the base periodIn the base period, typically the first four of the last five completed calendar quarters preceding the job loss, applicants for UI benefits generally must meet certain employment and earnings thresholds. for UI eligibility ranged from $130 to $4,860.

Second, while earnings requirements are a useful tool for comparing states, actual eligibility rates are also affected by state-level economic conditions. Consider the case of Massachusetts. Our previous blog post highlighted that Massachusetts has consistently had high base period earnings requirements, with its nominal qualifying amount coming in above the 75th percentile of states. At the same time, Massachusetts has one of the nation’s highest average incomes. The above map shows that despite Massachusetts having some of the toughest requirements in its UI law, it has actual eligibility rates higher than most other states.

The next figure shows the average replacement rate (i.e., the fraction of previous labor earnings replaced by UI benefits) for each state. We again note the variation across states. In Louisiana, the average worker can expect to receive only 42.6% of their weekly wage as UI payments if they are laid off, while in Hawaii this amount is 67.1%. Further, the map reveals the lack of a clear pattern between average eligibility rate and average replacement rate. Some states are both easy to qualify for and generous (Nevada), while others are easy to qualify for but not generous (New Hampshire) and vice versa (Oregon).

Share of Income Replaced with UI Benefits by State

SOURCE: Birinci and See (2026).

Variation in Takeup Behavior

A state’s takeup rate is the fraction of UI-eligible unemployed who choose to collect UI benefits. While this rate is related to the generosity of a state’s UI program (more benefits mean a greater incentive to apply), it is also driven by people’s personal choices. When deciding whether to take UI benefits, workers consider their own job finding probability, personal savings and opinions about government safety nets. The figure below reveals large differences among states in average takeup rates.

UI Takeup Rate by State

SOURCE: Birinci and See (2026).

Conclusion

Our research again reveals large differences among states in their UI programs. The relative strictness and generosity of these programs can have important consequences for newly unemployed workers.

The optimal design of a state’s UI program is a subject of academic research. Policymakers balance the help UI payments provide to jobless individuals with the understanding that offering too much money may result in job seekers reducing their job search activities or rejecting job offers. Which state is closest to the UI setup that maximizes the overall well-being of its residents? Our working paper on the subject (PDF) seeks to answer this question.

Notes

1. For an even deeper look at this methodology, see the January 2026 revision of Serdar Birinci and Kurt See’s Federal Reserve Bank of St. Louis working paper, “The Implications of Labor Market Heterogeneity for Unemployment Insurance Design.”
2. In the base period, typically the first four of the last five completed calendar quarters preceding the job loss, applicants for UI benefits generally must meet certain employment and earnings thresholds.