TY - JOUR T1 - How Income Changes During Unemployment JF - Journal of Human Resources JO - J Hum Resour SP - 418 LP - 456 DO - 10.3368/jhr.52.2.0414-6319R2 VL - 52 IS - 2 AU - Laura Kawano AU - Sara LaLumia Y1 - 2017/03/31 UR - http://jhr.uwpress.org/content/52/2/418.abstract N2 - We use a panel of tax returns spanning 1999 to 2011 to provide evidence on household experiences during unemployment. A period of unemployment is associated with a 20 percent reduction in annual household wage earnings. Unemployment insurance (U.I.) compensates for half of lost wages. Households also partially compensate using a variety of income sources. Distributions from retirement accounts increase in the short run. Self-employment income and disability insurance payments increase over longer periods. More generous U.I. benefits crowd out wage income and are associated with increased retirement account distributions. This combination of responses is consistent with U.I. benefits lengthening unemployment spells. ER -