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Requiring Unemployment Insurance recipients to register with the Public Employment Service (Director & Englander 1988)

Citation

Director, S., & Englander, F. (1988). Requiring Unemployment Insurance recipients to register with the Public Employment Service. The Journal of Risk and Insurance, 55(2), 245-258.

Highlights

  • The study’s objective was to examine the impact of New Jersey’s repeal of mandatory Employment Services (ES) registration for Unemployment Insurance (UI) claimants on the length of claimants’ UI spells and their probability of exhausting available UI benefits.
  • The authors compared UI outcomes before and after repeal using an interrupted time series design based on monthly, state-level time series data from 1971 to 1981.
  • The study found that the UI exhaustion rate and weeks of UI benefits received were lower when ES registration was mandatory than when it was voluntary.
  • The quality of causal evidence presented in this report is low. This means we are not confident that the estimated effects are attributable to mandatory ES registration; other factors are likely to have contributed.

Intervention Examined

More stringent work search requirements

Features of the Study

In 1971, New Jersey made registration for ES, a public program providing job search resources such as workshops and job search assistance, mandatory for all UI claimants. Four years later, in 1975, the legislature repealed the law, making ES registration voluntary for UI claimants. The idea behind the repeal was that those claimants who actually desired job search assistance would voluntarily register for ES, whereas those who did not desire the services could search on their own and certify their availability for work with the local UI office. Allowing claimants to voluntarily register for ES was hypothesized to free resources to give claimants more intensive assistance, because resources would not be used on those who were mandated to register with ES but really had no desire to receive ES.

This study investigated the impact of the policy change on UI claim duration and benefit exhaustion using monthly statewide UI claims data from 1971 to 1981. The authors compared the UI outcomes before the policy change to after the policy change while controlling for demographic characteristics of the insured unemployed; time; the business cycle; and UI policies such as mandatory registration, the wage replacement ratio, and the availability of extended benefits.

Findings

Public benefits receipt

  • The study found that the UI claim exhaustion rate was 6 percentage points lower when ES registration was mandatory than when it was voluntary (59 versus 65 percent, respectively).
  • The weeks of UI benefits received were 10 percent lower under the mandatory policy.

Considerations for Interpreting the Findings

The study used an interrupted time series design, comparing outcomes in the time period before the policy change with outcomes in the period following that change in one state. To provide high or moderate causal evidence, studies using this design must include multiple demonstrations of the impact—for instance, by introducing and withdrawing the policy at different times and/or for different units of observation. This is necessary because this method does not involve an explicit comparison group—for example, another state with similar labor market conditions that did not implement a policy change. Because the policy was implemented statewide, multiple demonstrations of the effect are not possible. Therefore, it cannot receive a high or moderate causal evidence rating. In addition, although the authors included many control variables in the analysis, we cannot be certain that the timing of the policy change was unrelated to other contextual factors that might also have resulted in the observed changes in UI benefit exhaustion and duration.

Causal Evidence Rating

The quality of causal evidence presented in this report is low. This means we are not confident that the estimated effects are attributable to mandatory ES registration; other factors are likely to have contributed.

Reviewed by CLEAR

June 2015

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