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The effects of eliminating the work search requirement on job match quality and other long-term employment outcomes. (Lachowska et al. 2015)

Citation

Lachowska, M., Meral, M., & Woodbury, S.A. (2015). The effects of eliminating the work search requirement on job match quality and other long-term employment outcomes. Washington, DC: U.S. Department of Labor.

Highlights

  • The study’s objective was to examine the impact of less-stringent work search requirements for unemployment insurance (UI) claimants on earnings, employment, and UI benefit receipt over a nine-year follow-up period. This study extended the work of Johnson and Klepinger (1991), the CLEAR profile of which is available here. The CLEAR profile of a related study, Lachowska et al. (2016), is available here.
  • The study examined data from a randomized controlled trial conducted in the 1980s in Washington State. UI claimants were randomly assigned to one of four groups, each with different work search requirements and/or verification of that work search. The authors used administrative data to compare the outcomes of the groups up to nine years after the initial UI claims.
  • The study found that the group with less-stringent work-search requirements was significantly less likely to be employed in the first quarter following their claims, compared with the groups with more-stringent requirements. In addition, they received more UI benefit payments for more weeks and exhausted UI benefits at a higher rate during the year following their initial claims.
  • The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the less-stringent work search requirements, and not to other factors.

Intervention Examined

Less stringent work search requirements

Features of the Intervention

In general, a work test (also referred to as a work search requirement) enables UI administrators to identify whether beneficiaries have become employed or stopped seeking employment after their initial UI claims; in either case, claimants would stop receiving UI benefits. The Washington Alternative Work Search (WAWS) experiment targeted UI claimants who had worked 680 or more hours in the year before filing their UI claims, were able and available for work, were laid off due to no fault of their own, and were registered with Public Employment Service unless under union placement or temporary layoff.

Eligible UI claimants were randomly assigned to one of four conditions:

  1. Exception reporting. Claimants received their customary weekly benefits unless they reported a change in status; this operated essentially as an honor system in which claimants were assumed to remain eligible for benefits and encouraged to participate in work search activities but were not obligated to report on those efforts.
  2. New work search. Claimants were required to submit biweekly continued claims and to attend an eligibility review interview four weeks after submitting their claims, during which they developed employability strategies.
  3. Standard work search. Claimants faced work search requirements typical in most states at the time: they were required to make at least three employer contacts per week in their primary industry and to participate in eligibility review interviews focused on work search activities 13 to 15 weeks after filing initial claims.
  4. Job search assistance. Claimants who remained unemployed after receiving benefits for 4 weeks were required to attend a two-day job-search training session. Those who were still unemployed after 12 weeks were required to attend an eligibility review interview to develop employability strategies.

For this study, the authors excluded the job search assistance services group from the analysis and combined the new work search and standard work search requirement groups into one pooled control group. The study included 1,606 claimants in the exception-reporting group and 2,612 claimants in the control group. This sample included those randomly assigned from July 1986 to May 1987, which is a subset of the full WAWS experimental sample reported in Johnson and Klepinger (1991).

Participants were predominantly white men. About 40 percent were ages 25 to 34, and 54 to 57 percent of participants had at least a high school degree. The authors collected data from the original WAWS experiment and Washington Employment Security Department’s quarterly UI administrative wage records for up to three years before the claim quarter and nine years following the claim quarter. The authors compared the outcomes of claimants in the exception reporting group with those of the pooled comparison group using statistical methods.

Findings

Employment

  • The study found that claimants in the exception-reporting group—which faced less stringent work search requirements—were 3 percentage points less likely to be employed in the year in the first quarter following their claims, compared with the control group.
  • The study found no other statistically significant differences in employment or earnings outcomes between the groups during any of the nine years of the follow-up period.

Public Benefits Receipt

  • In addition, one year after the initial claims, claimants in the exception-reporting group received about $451 more in UI benefits, received UI benefits for 3.26 more weeks, and were 11 percent more likely to exhaust UI benefits, compared with the control group.

Considerations for Interpreting the Findings

To increase statistical precision, the authors combined the standard work search requirement group and the new work search group to form a pooled control group. They noted that earlier published reports did not find any differences between the impacts of the standard work search requirement and new work search groups.

In a later study, Lachowska et al. (2016), the authors used different naming conventions for the study groups than were reported in both this study and the original Johnson and Klepinger (1991) study. They also designated the treatment and control groups differently, making it difficult to compare the findings across the studies. Generally speaking, the balance of evidence from the studies of WAWS suggests that the less-stringent work search requirements, as implemented in the group known as exception-reporting or no work test, depending on the study, led to lower short-term employment and higher short-term UI benefit receipt duration, total amount, and likelihood of exhausting benefits than standard or slightly modified work-search requirements. The long-term employment and short- and long-term earnings of claimants subject to the less-stringent work search requirements were no better or worse than those of the groups subject to more-stringent work search requirements.

Causal Evidence Rating

The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the less stringent work-search requirements, and not to other factors.

Additional Sources

Lachowska, M., Meral, M., & Woodbury, S.A. (2016). Effects of the unemployment insurance work test on long-term employment outcomes. Labour Economics, 41, 246–265.

Reviewed by CLEAR

October 2016

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