Keeping vulnerable Californians in jobs: examining different unemployment insurance programs and strategies for job retention

Social and Economic Outcomes

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Research Updates

Updated January 2025
We compared regular Unemployment Insurance (UI) to Short-Time Compensation (STC), a layoff prevention program which provides prorated benefits to workers with reduced hours. We described who used these programs during the COVID-19 Pandemic, then identified which program yielded better labor market outcomes. Our analysis found that program take up is low in California, in particular among disadvantaged workers. We also found that STC claimants experienced less income disruption, higher employment rates and more job stability. This suggests that STC was effective at maintaining worker-employer relationships during a turbulent period and there is opportunity to increase STC take up in California.

Proposed Research and Background

During the COVID-19 pandemic, the California labor market saw an unprecedented rise in unemployment – in particular among vulnerable, low-wage workers – and the widespread reliance on UI benefits to assist affected workers. UI offered three programs to support these workers: (1) Full UI benefits; (2) Partial UI benefits for workers with reduced work hours; and (3) STC, which is similar to Partial UI but with more generous financial benefits and health insurance continuity. Even though UI is the main program assisting workers in recessions, currently little is known about how these three programs served working Californians, or how equitable their use and impacts on worker outcomes were. We are particularly interested in STC because it has financial and health advantages for workers and because the state has made STC expansion a priority.

To better understand how different groups of workers were served by UI and help inform expansion of the STC program, we have partnered with California’s Employment Development Department to access over 20 years of administrative data on employment, earnings, and employer outcomes, as well as detailed demographic, location, and industry characteristics. We are using these data to compare employment, earnings, and job outcomes for workers participating in Full UI, Partial UI, and STC during the COVID-19 crisis, with particular focus on equitable program take up and recovery. We will also compare the usage of STC to that of Partial UI among workers and businesses. We will use demographic, location, and industry information to observe differences among groups. We will also compare the incidence of STC to that of Partial UI among workers and businesses. Finally, we will provide data-driven recommendations that California can use to expand its STC program, based on the state’s current outreach efforts, historical data, labor market conditions, and projected benefits and costs.