III.

Methods

State unemployment compensation laws establish a fund, financed by contributions from employers, from which weekly unemployment benefits are paid for a specified number of weeks. Employers' contributions are based on experience rating; that is, they are related to the amount of benefits received in the past by workers laid off from the business. A few states also require contributions from employees. To be eligible for benefits, an unemployed worker must have earned a given amount of wages within a specific period of time. In addition, a worker must file a claim, register for work at the state employment service, be able to work, and be available for suitable work. A claimant may be disqualified from benefits for varying periods if he or she left a job voluntarily without good cause, was dismissed for misconduct, or refused an offer of suitable work. Until another job is found or the benefit period ends, a worker receives a weekly payment by reporting at scheduled intervals to the local unemployment office.

In the U.S., unemployment insurance replaces about half of the aftertax wages lost each week up to a prescribed maximum; the higher the worker's usual earnings, the lower is this fraction. The average beneficiary draws benefits for about 15 weeks (longer during recessions). Less than half of the unemployed receive benefits, mainly because many unemployed workers do not have sufficient employment experience to qualify for benefits. Fewer than one-third of all beneficiaries fail to return to work before exhausting their benefits.