Extending unemployment insurance (UI) in economic downturns is common policy practice in the United States, as exemplified by the Great Recession and the COVID-19 crisis. The academic and policy debate over the desirability of such a policy continues. At the heart of the discussion is the insurance-incentive tradeoff involved in UI design: it is arguably optimal to extend UI during downturns if its moral hazard cost is lower during those periods. Despite the wealth of literature on this topic, several important questions remain unresolved