State of Working Colorado: Unemployment insurance – The primary safety net

If a worker loses his or her job through no fault of his or her own, the worker may apply for unemployment insurance (UI) benefits. Under the program, unemployed workers receive payments in proportion to their past earnings while they look for new jobs. Those payments are funded by contributions to the state unemployment trust fund, made by employers on behalf of their workers. Thus a laid-off worker gets UI benefits paid for while he or she was still working. Unemployment insurance is the front-line safety net in times of economic hardship.

The state provides a maximum of 26 weeks of UI payments. However, beginning in 2008, the federal government began funding a number of extensions and supplements to unemployment insurance benefits because of the severity of the recession. Currently, laid-off Coloradans may receive up to 99 weeks of benefits.

The unemployment insurance recipiency rate is the percentage of the unemployed (those who are without work and looking for work) who are receiving benefits. The unemployment insurance exhaustion rate is the percentage of UI recipients who have expended their full 26 weeks of standard state benefits.

Colorado’s UI recipiency and exhaustion both increased dramatically as the economy worsened and jobs became harder to find. Given the prolonged high unemployment these numbers will likely see another increase reflected in the 2010 data.
 

Compared to the nation as a whole, fewer Coloradans receive unemployment insurance, but of those who do, a higher share exhaust the standard 26 weeks.

For more insights, including detailed policy recommendations for enhancing economic security for all Coloradans, check out the State of Working Colorado 2010.