Category Archives: Unemployment

Separate and Unequal: The Dimensions and Consequences of Safety Net Decentralization in the U.S. 1994–2014

Source: Sarah K. Bruch, Marcia K. Meyers, and Janet C. Gornick, University of Wisconsin, Institute for Research on Poverty, DP 1432-16, August 2016

From the abstract:
In this paper, we examine the dimensions and consequences of decentralized social safety net policies. We consider the adequacy of benefits and inclusiveness of receipt for eleven federal-state programs that constitute the core of safety net provision for working age adults and families: cash assistance, food assistance, health insurance, child support, child care, preschool/early education, unemployment insurance, state income taxes, cash assistance work assistance, disability assistance, and housing assistance. In the first part of the paper we examine the extent of cross-state inequality in social provision. We find substantial variation across states; variation that is consistent with policy design differences in state discretion; and at levels equal to or greater than variation across the European countries that have been recognized as having different welfare regimes. In the second section, we turn to an analysis of change over time (1994 to 2014) examining four dimensions of convergence: degree, location of change, direction of change, and scope. We find both decreases (retrenchment) and increases (expansions) of provision, a handful of cases of convergence (decreasing inequality) and divergence (increasing inequality), and a great deal of synchronous change and persistence in the magnitude of cross-state inequalities.

The Effects of Unemployment Insurance Benefits: New Evidence and Interpretation

Source: Johannes F. Schmieder, Till Von Wachter, National Bureau of Economic Research (NBER), NBER Working Paper No. w22564, August 2016
(subscription required)

From the abstract:
The Great Recession has renewed interest in Unemployment Insurance (UI) programs around the world. At the same time, there have been important advances in both theory and measurement of UI. In this paper, we first use the theory to present a unified treatment of the welfare effects of UI benefit levels and durations and derive convenient expressions of the disincentive effect of UI. We then discuss recent estimates of the effect of UI benefit levels and durations on labor supply based, to a large extent, on high-quality research designs and administrative data. We relate these estimates directly to the sufficient statistics identified by the model. We also discuss several active and open areas of research on UI. These include the effect of UI on aggregate labor market outcomes, the effect of UI on job outcomes, the long-term effects of UI, the effects of UI under non-standard behavioral assumptions, and the interactions of UI with other programs. While our review of the new experimental estimates confirms the range of negative labor supply effects of the previous literature, we show based on the model that these estimates are imperfect proxies for the actual disincentive effects. We also isolate several important areas in need for additional research, including estimates of the social value of UI as well as the effects of UI in less-developed countries.

How Do Financial Resources Affect the Timing of Retirement after a Job Separation?

Source: Matthew S. Rutledge, ILR Review, Vol 69 no. 5, October 2016
(subscription required)

From the abstract:
This study examines working people between the ages of 50 and 70 years old and the conditions that lead them to decide to retire or not after they experience a job separation. Based on data from the Survey of Income and Program Participation, the author finds that among individuals whose jobless spells end in retirement, most decide to retire within a year after separation. The availability of resources such as Social Security retirement benefits, high net worth, and income from defined benefit pensions appear to encourage more rapid labor force exit and retirement, rather than supporting job seekers during a long search. Perhaps surprisingly, no correlation between retirement and the unemployment rate occurs, but unemployment insurance benefits do delay retirement. These results suggest little tolerance for long job searches regardless of labor market prospects and indicate that those who can afford to retire will do so rather quickly.

Testing Attestations: U.S. Unemployment and Immigrant Work Authorizations

Source: Ben A. Rissing and Emilio J. Castilla, ILR Review, Vol 69 no. 5, October 2016
(subscription required)

From the abstract:
Each year, hundreds of thousands of immigrants seek legal employment in the United States. Similar to many developed countries, the United States has established immigration policies to protect its citizens’ employment. This study empirically assesses, for the first time, the relationship between U.S. workers’ unemployment rates and immigrant work authorization outcomes, as determined by one key U.S. immigration program—the labor certification process. This program explicitly requires that no willing and qualified U.S. worker be available for the job position offered to a foreign worker. Through the analysis of 40 months of labor certification requests evaluated by U.S. Department of Labor agents, the authors find that, ironically, immigrant labor certification approvals are more likely when the quantity of unemployed U.S. workers within an occupation is high, ceteris paribus. Further, because of the U.S. government’s procedure of auditing applications, the authors are able to assess approval differences when government agents reach similar labor certification decisions using 1) employers’ accounts of their own compliance (e.g., “attestations”) or 2) supporting documentation collected when employers are audited. Only for evaluations of audited applications, in support of the literature on accounts and regulation, are approvals less likely when unemployment is high. The authors conclude by discussing the implications of their findings for theories and policies concerning labor market regulation, immigration, and employment.

Increases in Local Unemployment and the Delivery of Trade Adjustment Assistance Services

Source: Justin Barnette, Jooyoun Park, Economic Development Quarterly, Published online before print September 7, 2016
(subscription required)

From the abstract:
This study investigates how service delivery of employment-related federal programs administered at American Job Centers (AJCs) changes as local unemployment increases. The authors analyze the impact of such changes on labor market outcomes of program participants using data for the Trade Adjustment Assistance (TAA) participants. The authors find that the demand for TAA services increases substantially when local unemployment increases. A 5% to 10% increase in unemployment raises training enrollment through the TAA program by nearly 13 percentage points and increases participation duration by more than 9 weeks. Our results do not support the concern that a sudden rise in the demand for AJC services might deteriorate the quality of service delivery and outcomes. In fact, although increases in local unemployment are generally harmful to displaced workers, occupational training during this time is effective at reducing the size of wage loss by at least 46%, resulting in a 3.4% average increase for wage replacement rates.

Displaced Workers Faring Better, But Many Remain Unemployed

Source: Mike Maciag, Governing, August 26, 2016

New data on displaced workers shows that those in the South have had the hardest time finding new jobs…. The data further depict noticeable differences across regions. For the most part, long-tenured workers suffering job losses in the Western U.S. were most successful at securing new jobs. Between 71 and 75 percent regained employment in the western regions of the country. By comparison, only 53 percent surveyed were working in what’s considered the East South Central division: Alabama, Kentucky, Mississippi and Tennessee. …. Those who did manage to find work often took pay cuts. Nearly half (47 percent) of displaced full-time workers reported earnings that were less than their previous job. Only a third of wholesale/retail trade and finance workers who obtained employment matched their prior earnings. An even smaller share — 27 percent — of rehired workers in the information industry, which includes software publishing and media-related communications, were able to secure new jobs with equal or better pay. ….

Smart Skills versus Mindless Megadeals: Cost-Effective Workforce Development versus Costly “Buffalo Hunting,” with Proven Policy Solutions

Source: Thomas Cafcas and Greg LeRoy, Good Jobs First, September 2016

From the abstract:
Using data from dozens of programs and deals in Good Jobs First’s Subsidy Tracker database, we draw sharp comparisons between the costs of workforce development programs versus company-specific “megadeals.” Whereas 31 out of 33 training programs have four-figure costs per job, our current megadeals database shows an average cost to taxpayers of more than $658,000 per job.
Press release

Exploring the Redistribution of Manufacturing Employment Among the American States in the Face of Overall Declines in Employment

Source: Richard V. Adkisson, Comfort F. Ricketts, Economic Development Quarterly, Vol. 30 no. 3, August 2016

From the abstract:
Over the period 2001-2011 national employment in all 21 North American Industry Classification System (NAICS) industries has trended downward. The change in employment appears to be correlated with the regional redistribution of employment. This study explores changes in manufacturing employment between 2001 and 2012 as influenced by initial state-specific socioeconomic characteristics, state policy, market access, and state- and industry-specific conditions. The analysis is conducted for all 21 NAICS manufacturing industries to observe patterns and deduce information about factors that most consistently and frequently influence manufacturing employment in these industries across the United States.

Strengthening Unemployment Protections in America: Modernizing Unemployment Insurance and Establishing a Jobseeker’s Allowance

Source: Rachel West, Indivar Dutta-Gupta, Kali Grant, Melissa Boteach, Claire McKenna, Judy Conti, Center for American Progress, Georgetown Center on Poverty and Inequality, and the National Employment Law Project, June 2016

From the summary:
…..To protect more working families from the risk and hardships of unemployment, policymakers should act now to fortify the nation against the next recession. America must ensure a robust employment, training, and income-security system for involuntarily unemployed workers by substantially strengthening UI. Further, our nation must also help the many jobseekers who will not qualify for traditional UI—even under a modernized UI system—to actively seek employment, connect to job opportunities, and improve their work-related skills.

To this end, the Center for American Progress, or CAP; the Georgetown Center on Poverty and Inequality, or GCPI; and the National Employment Law Project, or NELP, came together on a proposal to modernize the nation’s system for assisting unemployed jobseekers. This report proceeds in two distinct sections.

Section 1 proposes ambitious, but strongly needed, reforms to UI. This includes bolstering UI’s effective re-employment services to connect more jobseekers with workforce development opportunities and strengthening tools such as work sharing that help workers stay in the jobs that they already have. It includes detailed reforms to expand UI eligibility to reach more unemployed workers, improve the adequacy of UI benefits, and increase participation in the program. In addition, this section recommends reforms to UI’s financing that would improve the program’s solvency, as well as steps that would improve UI’s ability to respond to future recessions, including repairing the Extended Benefits program. In

Section 2, the report recommends the establishment of a new Jobseeker’s Allowance, or JSA, for workers who would remain ineligible for UI. This section describes the need for a modest, short-term benefit that would assist jobseekers such as unemployed independent contractors and those with limited work history. The report lays out eligibility criteria for the JSA, characterizes the moderate but important benefits and services the JSA would provide, and outlines the administration and financing of the proposed program. Finally, the report briefly describes the anticipated costs of the proposal, including both reforms to UI and the new JSA……

Unemployment Insurance: States’ Customer Service Challenges and DOL’s Related Assistance

Source: U.S. Government Accountability Office (GAO), GAO-16-430, Published: May 12, 2016

From the summary:
In GAO focus groups of recent claimants filing for unemployment insurance (UI) benefits, those who filed by phone reported experiencing various challenges, such as long call wait times; however, those filing for benefits online reported that it was generally easy to do. In all six of the focus groups GAO conducted in the three states it visited, individuals who had claimed benefits by phone between July 2014 and July 2015 reported experiencing challenges with the state UI program’s customer service. GAO defined customer service as including ease of program access, courtesy, timeliness, and accuracy, as well as responsiveness to customer needs and expectations. Some participants in all six focus groups reported experiencing long call wait times and difficulties using automated phone systems. In addition, in two of the states visited, representatives of advocacy groups reported that special populations, including individuals with limited English proficiency, had difficulty accessing the UI program. In GAO’s survey of state UI programs, most states—including those GAO visited— reported collecting some data on customer service challenges for claimants. For example, 38 states reported collecting data on average call wait times.

Many states reported challenges in providing customer service, including staffing issues, and most have taken some steps to improve customer service, such as increasing self-service options. Specifically, more than half the states GAO surveyed reported insufficient staffing, outdated Information Technology (IT) systems, and funding constraints, all of which could play a role in claimant challenges. Many states also reported that they have taken or are planning to take some actions to improve customer service. For example, 45 states reported taking action to provide self-service options, and 42 states reported taking action to provide customer service training to program representatives.

The Department of Labor’s (DOL) Employment and Training Administration (ETA) provides states with monitoring and assistance on some aspects of customer service. ETA monitors and measures state performance on the timeliness of benefit payments and appeals decisions. ETA also monitors and measures the accuracy of states’ non-monetary eligibility determinations, such as whether states accurately assess reasons for claimants’ separation from employment. In addition, ETA provides states with various technical assistance. ETA has provided states with assistance on IT modernization, staffing issues, and program access for special populations. UI program officials in the three states GAO visited said they could benefit from more information on other states’ successful customer service practices, including practices for addressing continuing staffing and IT challenges. ETA plans to share these practices on an ongoing basis, officials said. For example, officials said ETA plans to share successful practices—including those related to staffing—obtained from its national study of call center operations through its online community of practice. ETA also plans to continue to collect lessons learned from state IT system modernization efforts and disseminate them to states.