Association for Public Policy Analysis and Management

An extensive literature documents large and persistent declines in earnings following job loss. We study how the public safety net mitigates this using the 1996-2013 Survey of Income and Program Participation. Using an individual fixed effects model, we document which public programs provide the most insurance, and how this varies by pre-job loss characteristics. We find that Unemployment Insurance provides the largest buffer against lost income, but that the neediest are less well insured compared to middle-and higher-income job losers. This has important implications for the progressivity of the safety net, and how best to support displaced workers.