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The labor market effects of U.S. reemployment programs during the Great Recession. (Michaelides & Mueser 2016)

Citation

Michaelides, M., & Mueser, P. (2016). The labor market effects of U.S. reemployment programs during the Great Recession. (Working paper 08-2015). Nicosia, Cyprus: University of Cyprus, Department of Economics.

Highlights

  • The study’s objective was to examine the impact of Florida’s Priority Reemployment Services (PREP) program on Unemployment Insurance (UI) claimants’ reemployment rates, earnings, and receipt of UI benefits.
  • The study was a randomized controlled trial. UI claimants were randomly assigned to either a treatment group that could receive PREP services, another treatment group that could receive Reemployment Eligibility and Assessment (REA) services, or a control group that had access to neither. The authors examined administrative data from Florida’s UI claims and wage records.
  • The study found that the PREP group had significantly higher reemployment rates and lower UI benefit receipt but had similar earnings as the control group.
  • 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 PREP program, and not to other factors.
  • The study also examined the impact of Florida’s REA program compared with the control group. CLEAR’s profile of that study is available here.

Intervention Examined

Profiling

Reemployment Eligibility Assessment

Features of the Intervention

The PREP program was Florida’s Worker Profiling and Reemployment Services program. Program staff used UI administrative records to identify claimants at risk of exhausting regular UI benefits and referred them to a group orientation at a local One-Stop Career Center (now known as American Job Centers). During the orientation, participants learned about job search services, including automated job banks, employment workshops, and individual counseling. Although PREP group members were informed that participation in the orientation was required, it was not strictly enforced.

Features of the Study

The study used a randomized controlled trial. UI claimants in Florida who started collecting benefits in August to November of 2009 were randomly assigned to either a treatment group that could receive PREP services, a different treatment group that could receive REA services, or the control group. Members of the control group were not specifically referred to any services, but could have sought any publicly available services or trainings. In total, 58,733 UI claimants were randomly assigned in Florida.

The authors used a statistical method to compare the outcomes of PREP and control group members using administrative data from the state of Florida.

Findings

Earnings and wages

  • The study found that PREP group members were 1.1 percentage points more likely to be employed four quarters after random assignment than control group members. There were no statistically significant impacts on earnings.

Public Benefits Receipt

  • PREP significantly reduced UI benefit exhaustion, duration, and amounts. PREP participants exhausted their benefits at a rate 1.3 percentage points less, collected UI benefits for 0.75 fewer weeks, and collected $170 less in the year after random assignment than members of the control group.

Considerations for Interpreting the Findings

The authors noted that, of the UI claimants offered PREP services, only a small portion attended the orientation meeting (36 percent) and very few actually received other reemployment services (1 percent accessed job counseling services and 2 percent attended workshops). Given this low take-up rate, the authors speculated that simply the presence of the program might have caused some UI claimants to cease receipt of UI benefits to avoid participating in PREP 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 PREP program, and not to other factors.

Additional Sources

Poe-Yamagata, E., Benus, J., Bill, N., Carrington, H., Michaelides, M., & Shen, T. (2011). Impact of the Reemployment and Eligibility Assessment Initiative. Columbia, MD: IMPAQ International.

Reviewed by CLEAR

October 2016

Topic Area