Many of the Unemployed in America Don't Collect Unemployment

4798About 2 million jobless Americans fear they'll lose their extended unemployment benefits, which are slated to end next month unless Congress votes to renew them.

A National Career Fairs' job fair in New York in October. / Associated Press
Their concerns make a new finding all the more puzzling: Many people eligible for unemployment don't even bother to collect it.

In the depths of the recession in 2008 and 2009, only half of those who qualified for benefits applied, a study by the St. Louis Federal Reserve Bank shows.

The portion filing for benefits shot up to 95% in 2010 and 2011, the study says, but that still means about 200,000 people didn't claim money to which they were entitled.

"They're throwing the money out the window," says David Fuller, an economics professor at Concordia University in Montreal and co-author of the report, which analyzed Bureau of Labor Statistics data.

Many unemployed people aren't eligible for benefits because they worked part-time or weren't at their jobs long enough, for example. In 2009, about 3 million of the average 14.5 million or so jobless people didn't qualify for benefits.

But of the roughly 11.4 million who were laid off and eligible to collect that year, only about 5.7 million filed claims, according to Fuller and the BLS. Those who didn't saved state and federal governments $108 billion -- nearly as much as the $121 billion in benefits paid, the study says. That sum dwarfed the $11 billion in benefit overpayments due to clerical errors or fraud.

States pay the first 26 weeks of unemployment insurance. During and after the recent recession, the federal government has paid extended benefits beyond that up to 73 weeks.

The willingness of many jobless Americans to forego unemployment checks isn't new. From 1988 to 2011, an average 37% of those eligible passed on the benefits.


Source: Detroit Free Press | Paul Davidson - USA Today
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