By Matt Weidinger | Amy Simon
Key Points
The nation’s unemployment benefits system, which was significantly expanded during the COVID-19 pandemic, suffered unprecedented losses to fraud and improper payments.
Official—and still partial—estimates of improper payments approach $200 billion, while unofficial estimates suggest $400 billion or more may have been lost.
There are multiple causes of these record improper payments, including historically large benefits, poor program design including eligibility self-certification in new programs, and degraded administrative systems without adequate defenses against various fraudulent schemes.
State and federal policymakers should review the causes and consequences of these unprecedented losses and take specific steps, such as those outlined in this report, to both prevent a recurrence of the record taxpayer losses experienced during the pandemic and better establish a proactive anti-fraud posture for the unemployment insurance system.
Washington, DC: American Enterprise Institute, 2024. 45p.
