Absence of conflict of interest. This study was conducted by staff from Mathematica Policy Research, which administers CLEAR. Therefore, an independent consultant trained in applying the CLEAR causal evidence guidelines reviewed this study.
O’Leary, C.J., Decker, P.T., Wandner, S.A. (2005). Cost-effectiveness of targeted reemployment bonuses. Journal of Human Resources, 40, 270-279.
- The study examined the impact of the Pennsylvania Reemployment Bonus Demonstration on the amount of Unemployment Insurance (UI) receipt and on earnings of UI claimants approximately one year after program enrollment, both overall and for subgroups of claimants defined by their likelihood of exhausting UI benefits. The authors also examined the impact of the Washington Reemployment Bonus Demonstration; this study is an additional source to the main source examining that intervention, profiled here.
- About 15,000 eligible claimants were randomly assigned to one of six treatment groups or a control group. The six treatment groups were offered different combinations of reemployment bonus amounts and periods within which they were required to find a job in order to claim the bonus. The authors analyzed state administrative data and survey data of a subsample of approximately 5,000 participants from the original demonstration.
- The study found that the pooled bonus treatments in Pennsylvania reduced the total UI benefit amount received, but did not have a significant impact on earnings. Pooling across all bonus treatments, Pennsylvania treatment group members received $113 less in UI benefits, on average, than their control group counterparts.
- The quality of causal evidence for the Pennsylvania demonstration is low because the authors did not demonstrate that they adjusted for changes in rates of assignment to treatment and control conditions and did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to the Pennsylvania Reemployment Bonus Demonstration; other factors are likely to have contributed.
- See more CLEAR profiles related to The Reemployment Bonus Experiments.
Pennsylvania Reemployment Bonus Demonstration
Features of the Intervention
Implemented in 12 randomly selected offices across Pennsylvania, the demonstration restricted eligibility to UI claimants who had filed within the past two weeks, did not have a definite recall date to their former employer, and did not routinely obtain employment through a union hiring hall. The demonstration had six different bonus offerings. The first four entailed different combinations of reemployment bonus amounts—either three or six times the UI weekly benefit amount—and periods within which participants were required to find a job in order to claim the bonus, known as a qualification period. The qualification period was either 6 or 12 weeks. The fifth type of bonus declined from the highest amount (six times the weekly benefit amount) to zero over the course of the benefit period, and the sixth was essentially the same as the fourth, except that it excluded the offer of a job search workshop, which was available to all five other bonus groups. To claim any bonus, claimants needed to maintain employment for four months.
Features of the Study
In 1988 and 1989, about 15,000 eligible UI claimants in Pennsylvania were randomly assigned into one of the six reemployment bonus groups or a control group. Participants randomly assigned to the control group received the same weekly UI benefits payments over the same maximum weeks of eligibility, but were not offered a reemployment bonus. Using data from UI administrative records, the study estimated the average difference between the pooled treatment groups and the control group on UI benefit amounts and earnings approximately one year after program enrollment.
UI benefit receipt
- The pooled bonus treatments reduced the UI benefit amount received by $113 relative to the control group.
- The pooled bonus treatments did not have a significant impact on earnings approximately one year after program enrollment.
Considerations for Interpreting the Findings
The Pennsylvania Reemployment Bonus Demonstration is based on a randomized controlled trial design. However, rates of assignment to treatment and control conditions changed over the course of the study, and the authors did not account for these changes in their analysis. In addition, the authors did not account for existing differences between the groups before program participation. These existing differences between the groups—and not the program—could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence for the Pennsylvania demonstration is low because the authors did not adjust for changes in rates of assignment to treatment and control conditions and did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to the Pennsylvania Reemployment Bonus Demonstration; other factors are likely to have contributed.
Corson, W., Decker, P., Dunstan, S., & Kerachsky, S. (1992). Pennsylvania Reemployment Bonus Demonstration final report (Unemployment Insurance Occasional Paper 92-1). Washington, DC: Employment and Training Administration, U.S. Department of Labor.
O’Leary, C.J., Decker, P.T., and Wandner, S.A. 1998. Cost-Effectiveness of Targeted Reemployment Bonuses (Upjohn Institute Working Paper No. 98-51). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.