MEDIA RELEASE: Unemployment Insurance Slows the Recession in All 100 Counties

Unemployment Insurance Slows the Recession in All 100 Counties 

Statewide economic impact of insurance payments is $3.7 billion and counting

RALEIGH (April 8, 2009) - Since the start of the recession, North Carolinians have received $2.2 billion in unemployment insurance payments. These benefits, in turn, have generated $3.7 billion in economic activity across all 100 of the state's counties. Absent unemployment insurance payments, the state's economic woes would be worse.
These findings come from a new BTC Brief authored by John Quinterno, a research associate at the NC Budget & Tax Center. The brief estimates the statewide and county-by-county impacts of insurance payments made between Dec. 2007 and Feb. 2009.

"Unemployment insurance payments help families struggling with a job loss make ends meet," says Quinterno. "Because most payments are spent quickly and locally on such basic expenses as rent and groceries, the insurance benefits also help to sustain local economic activity."

"Since the recession's start, unemployment payments - both regular, state benefits and supplemental, federal ones - have generated $3.7 billion in economic activity," explains Quinterno. "This is equal to 2.3 percent of all the wages paid in the state in 2007."

To compute the economic impact, the author compiled payment information from the Employment Security Commission and applied an economic multiplier of $1.64. Due to issues of data availability, the statewide figure includes the impact of federal and extended benefits while county-level figures reflect only regular state payments. This makes the local estimates quite conservative.

"Unemployment insurance payments have benefited all 100 North Carolina counties," adds Quinterno. "While the greatest numbers of dollars have flowed to the state's large urban counties, the payments have had a proportionally greater impact in rural counties." 

In dollar terms, the economic impact of unemployment insurance benefits has been most pronounced in Mecklenburg County ($294.6 million), followed by Wake ($201.9 million),  Guilford ($145.6 million), Forsyth ($91.9 million) and Gaston ($87.3 million) counties. Relative to the size of local wage bases, the economic impact has been greatest in McDowell County, followed by Graham, Caswell, Stokes and Martin counties.

"The economic impact of unemployment insurance only will grow as the recession progresses," notes Quinterno. "The federal recovery legislation expanded and extended the unemployment insurance system in important ways that will benefit people and places across the state in the coming months."

The full brief is available on-line at 

For More Information, Contact: John Quinterno, 919-856-3185 (office); 919-622-2392 (mobile)


The NC Budget & Tax Center provides timely, accessible and credible analysis of state and local budget and tax issues with a special focus on the impact on low- and moderate-income North Carolinians.