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Two essays on unemployment insurance: Claimant responses to policy changes [Comparison between claimants who applied for UI benefits before and after WPRS] (Noel 1998)

Absence of conflict of interest.

Citation

Noel, B. J. (1998). Two essays on unemployment insurance: Claimant responses to policy changes (Doctoral dissertation). Retrieved from UMI (UMI No. 9922624). [Comparison between claimants who applied for UI benefits before and after WPRS]

Highlights

  • The study’s objective was to examine the impact of reemployment services through the Worker Profiling and Reemployment System (WPRS) on unemployment insurance (UI) benefit receipt and earnings for individuals who applied for UI in Kentucky. The authors investigated similar research questions for another contrast, the profile of which can be found here.
  • The author compared outcomes for treatment group members, who were eligible to receive reemployment services, and comparison group members, who were not eligible to receive the reemployment services but could access other services in the community, using data from the Kentucky Department of Employment Services Unemployment Insurance administrative records.
  • The study found statistically significant relationships between the WPRS reemployment services and UI benefit receipt and earnings, where those offered the reemployment services received fewer UI benefits in 26 weeks and earned more in one year, compared to those who did were not eligible to receive reemployment services.
  • The quality of causal evidence presented in this report is low because the author did not account for trends in outcomes before the intervention. This means we are not confident that the estimated relationships are attributable to the WPRS reemployment services; other factors are likely to have contributed.

 

Intervention Examined

Profiling

Features of the Intervention

The reemployment services were offered as part of the WPRS, which was established in October 1994. Individuals were eligible for WPRS reemployment services if they were determined to be likely to exhaust UI benefits. To make this determination, the program assigned each person a profiling score based on his or her characteristics, such as educational backgrounds, occupation, industry, and work history.

Individuals with eligible profiling scores were assigned an orientation session, during which they would complete a questionnaire to determine which type of services best suited the needs of the individual. Individuals were deemed “job ready” because they had job skills, were willing to obtain a job with wages lower than their previous position, and had employable skills. Individuals without these characteristics were classified as “not job ready.”

Job-ready individuals received less intensive services, provided by staff at the local employment services office, including an in-depth interview, development of a service plan, and provision of labor market information like job listings, employer recruiting efforts, and information on new businesses. Some job-ready individuals also received referrals to job openings and completed self-directed job searches. Individuals who were not job ready received more intensive services, provided by staff at the local employment services office. These services included an initial assessment and additional testing for vocational aptitudes and interest; employment counseling, including developing a plan for reaching their employment goals; five-hour job search workshops on topics like skills inventory, resume writing, labor market information, and managing stress and family budgets; referrals to training and education; job referrals; self-directed job searches; and allowances to fund job searches outside of their area.

Features of the Study

This study a nonexperimental analysis that included 107,968 individuals who applied for UI benefits in Kentucky from July 1993 to June 1996. The sample included 48,002 treatment group members who applied for UI benefits from October 1994 to June 1996 and were selected to receive reemployment services and 59,966 comparison group members who were not offered reemployment services. The sample was constructed by matching all individuals who were eligible to receive reemployment services to ineligible individuals who had the same profiling scores and were served by the same local areas, but could have applied for benefits at different times. In the comparison group, 9,777 individuals applied for UI benefits after the WPRS reemployment services began in 1994 but were not offered the services due to resource constraints, and 50,189 individuals applied for UI benefits from July 1993 to June 1994, before the WPRS reemployment services began. The author used data from the Kentucky Department of Employment Services UI Administrative records to compare UI benefit receipt for 26 weeks and earnings for one year after the UI claim was placed. To account for members of the comparison group coming from two different time periods, the author controlled for the time period in which the individual applied for UI benefits in the statistical model. The author also controlled for profiling scores and the location in which the individual applied for benefits, but did not control for demographic characteristics or pre-intervention earnings or employment.

Findings

Benefits receipt

  • The study found that individuals in the treatment group received $65 less in UI benefits than the comparison group over the 26-week follow-up period. The treatment group also received 2.2 fewer weeks of UI benefits than the comparison group during the 26-week period. These were statistically significant differences.

Earnings

  • The study found that individuals in the treatment group earned $218 more in the year after UI claim than individuals in the comparison group; this was a statistically significant difference.

Considerations for Interpreting the Findings

The author did not account for existing differences between the groups before the offer of reemployment services. These existing differences between the groups—and not the reemployment services—could explain the observed differences in outcomes.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the author did not ensure that the groups compared were similar before the intervention. This means we are not confident that the estimated relationships are attributable to the WPRS reemployment services; other factors are likely to have contributed.

Additional Sources

Black, D., Smith, J., Berger, M., & Noel, B. (2003). Is the threat of reemployment services more effective than the services themselves? Evidence from random assignments in the UI system. American Economic Review, 93(4), 1313-1327.

Reviewed by CLEAR

October 2018

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