Evaluation of the Maryland Unemployment Insurance Work Search Demonstration (Benus et al. 1997)
Benus, J., Johnson, T., Klepinger, D., & Joesch, J. (1997). Evaluation of the Maryland Unemployment Insurance Work Search Demonstration. Prepared for the Maryland Department of Labor, Licensing and Regulation, 1-43. Baltimore, MD: Maryland Department of Labor.
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Klepinger, D., Johnson, T., and Joesch, J. (2002). Effects of unemployment insurance work-search requirements: The Maryland experiment. Industrial and Labor Relations Review, 56(1).
- The study assessed the effectiveness of four interventions designed to encourage rapid reemployment among Unemployment Insurance (UI) recipients.
- The study was a randomized controlled trial with more than 27,000 participants. Participants were randomly assigned to one of four treatment groups, each of which had different work search requirements, or to a control group that abided by existing requirements for receipt of UI benefits. The study used state UI administrative records to estimate impacts on employment, earnings, and UI benefit receipt.
- The authors found that the three treatments that imposed stricter work search requirements than those imposed on the control group reduced the amount of benefits received by $75 to $116 and duration of benefit receipt by 0.6 to 0.9 weeks, on average. There were no statistically significant differences between treatment and control groups on employment or earnings.
- The quality of causal evidence presented in this report is high because it was a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the work search treatments, and not to other factors.
Maryland restricted eligibility for the demonstration to monetarily eligible UI claimants who filed an initial claim from January 1, 1994, to December 31, 1994 in one of six state offices across five sites. These sites had been selected randomly proportional to size to ensure that the offices themselves were typical of Maryland unemployment offices. About 27,000 claimants who met the eligibility criteria were randomly assigned to one of four treatment groups or a control group, which had to abide by the typical requirements of two documented employer contacts per week without verification and no reemployment services.
- Treatment group A participants were required to make four employer contacts per week, rather than the typical two.
- Treatment group B participants were required to make two contacts per week (like the control group), but were released from the obligation to document those contacts. This was the only treatment group with weaker than typical work search requirements.
- Treatment group C participants were mandated to attend a four-day job search workshop early in their unemployment spells, in addition to typical work search requirements.
- Treatment group D participants were required to make two contacts per week (like the control group) and were informed that their contacts would be verified.
- Treatment group A, which required two additional employer contacts per week, reduced the amount and duration of UI benefits received by $116 and 0.7 weeks, on average. These differences were statistically significant.
- Treatment group B, which maintained the requirement of two employer contacts per week but did not require documentation of them, did not have an effect on UI benefit receipt outcomes.
- Treatment group C, which required claimants to participate in a job search workshop, reduced the amount and duration of UI benefits received by $75 and 0.6 weeks, on average, per claimant.
- Treatment group D, in which claimants were told that the two employer contacts would be verified each week, reduced the amount and duration of UI benefits received by $113 and 0.9 weeks, on average.
- Although treatment groups A, C, and D reduced UI benefit amounts and durations, they had no impacts on employment or earnings of participants relative to the control group. Treatment group B had no effect on UI benefit receipt outcomes, but did increase earnings relative to the control group in the first year by almost $350.
Considerations for Interpreting the Findings
Using hazard models, the authors estimated that the strictest interventions, mandatory job search workshop (treatment group C) and verified employer contacts (treatment group D), each increased the likelihood of exiting UI by 6 percent relative to the control group. The authors further noted that the impact of the mandatory workshop appeared to occur before the workshop itself, suggesting that the effort of attending the workshop deterred UI claimants from benefit receipt rather than helped them enhance their job search. The lack of differences in earnings between treatment groups that did exhibit impacts on UI benefit receipt and duration suggests that those claimants were not entering into lower-wage employment as a result of exiting UI earlier.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the work search treatments, and not to other factors.