Clarifying the consumption smoothing effect of unemployment insurance is essential for op-timizing its fund allocation and livelihood security function.Based on the monthly household diary data,we find that unemployment benefits increase significantly boosts unemployed households'consumption,and the magnitude of the consumption change is obvious,which can be better exaplained by the liquidity constraint hypothesis than the household production theory and the myopic hypothesis.Moreover,the un-employment benefits increase improves household consumption structure,including an increase in devel-opmental consumption with long-term benefits.Our findings reveal that increasing unemployment benefits is worthy of attention.