Unemployment Benefits

State unemployment insurance benefits provide financial assistance to eligibly unemployed workers during times of economic uncertainty. These programs at the state level are usually categorized as mandatory spending, thus they act as automatic stabilizers whose funding levels fluctuate with unemployment claims.

State Unemployment Benefits

Annualized quarterly estimates of state unemployment benefits are represented by the blue line1. The two sharp spikes in benefits expenditures correspond to hurricane Katrina (August 2005) and financial crisis (at least the unemployment spike which started in Fall 2008).

 

Unemployment Benefits Expenditures - Forecasts

Forecasts2 for Louisiana unemployment benefits are made from an aggregation of multiple statistical models designed to approximate the underlying data generating process of the available data. A Bayesian model averaging approach is used here to capture the joint uncertainty that any given model may be misspecified as well as capturing the probabilistic uncertainty inherent in each individual estimate. Observed data is given in blue while forecasts are presented in orange. The weighted average of all models used is represented by the solid orange line. The upper bound and lower of the cone of uncertainty surrounding these estimates is represented by the dashed upper and lower lines respectively.

 


  1. Please note that the graphs below are interactive HTML widgets. Please hover over each to examine the underlying data that comprises them.

  2. Forecasts are provided as a convenience and for informational purposes only without any explicit or implied warranty. The authors and publishers of this post and site bear no responsibility for the information provided here and cannot be held liable for any negative consequences that may arise due its publication. Forecasting the future is inherently a tricky proposition, and all forecasts have an error term attached to them. Please exercise caution when making financial and business decisions based on the information provided. Use this information as a single input into your decisions making process.

Patrick is an assistant professor of Economics at Louisiana Tech University. He researches interest rate determination and the inflationary consequences of suboptimal monetary policy. He teaches monetary economics, research methods & macroeconomic theory.