Personal Reemployment Accounts: Simulations for Planning Implementation

The proposed Back to Work Incentive Act of 2003 recommended personal reemployment accounts (PRAs) that would provide each eligible unemployment insurance (UI) claimant with a special account of up to $3,000 to finance reemployment activities. Account funds could be used to purchase intensive, supportive, and job training services. Any funds remaining in the PRA could be paid as a cash bonus for reemployment within 13 weeks, or drawn as extended income maintenance for exhaustees of regular UI benefits. Personal reemployment account offers would be targeted to UI beneficiaries most likely to exhaust their UI entitlements using state Worker Profiling and Reemployment Services (WPRS) models. The draft legislation called for a budget of$3.6 billion for PRAs, with the money to be committed over a two-year period. This report provides a simulation analysis of questions relevant to implementation of PRAs by states. The analysis is done using data for the state of Georgia. Simulations rely on recent patterns of intensive, supportive, and training services use. Simulations for alternative rules setting the PRA amount and varying behavioral responses are examined. Like the legislative proposal, simulated PRA offers are targeted using WPRS models. The key question examined is, how many PRA offers can a state make given a fixed budget? Proposed and alternative rules for substate budget allocation are also examined. The framework presented in this paper allows the exploration of several behavioral responses to incentives created by the PRA.profiling, worker, WPRS, personal, reemploymt, accounts, PRA, Upjohn, Eberts, O'Leary

Design of the Worker Profiling and Reemployment Services System and Evaluation in Michigan

The Unemployment Compensation Amendments of 1993, Public Law 103-152, require each state employment security agency to implement a Worker Profiling and Reemployment Services (WPRS) system. WPRS systems are intended to identify unemployment insurance beneficiaries who are most likely to exhaust their regular benefits, and refer them quickly to reemployment services to speed the transition to new employment. This brief paper was prepared for a national colloquium on WPRS held June 11-14, 1996 in Atlanta. The paper summarizes work done by the W.E. Upjohn Institute for Employment Research for the State of Michigan to design and implement a UI profiling model, and to design an evaluation of the WPRS system effectiveness.unemployment, insurance, reemployment, Eberts, O'Leary

Can competition among local governments constrain government spending?

An examination of the relationship between the number of local governmental units and the share of personal income going to local government expenditures, considering competition among both general-purpose and single-purpose government units.Expenditures, Public ; Municipal finance

Wagner's hypothesis: a local perspective

Wagner's hypothesis of an expanding public sector as an economy develops is tested using pooled time-series cross-sectional data for U.S. states from 1964 to 1986. Comparing government size among fiscal jurisdictions within a single nation reduces the problems of data comparability and of controlling for cultural and institutional differences that plague the more common international tests of this theory. Our results are inconsistent with Wagner's hypothesis, yielding a negative relationship between public-sector size and output. However, some empirical support is found in the protective services and public welfare components of government activity.Expenditures, Public

Examining the Effect of Industry Trends and Structure on Welfare Caseloads

Previous studies of the macro-economic determinants of welfare caseloads have had difficulty in explaining changes in welfare caseloads during the last decade or so using the simple macroeconomic measure of unemployment. Because welfare recipients will typically get entry- level jobs, employment variables that are closely related to job vacancies, such as employment growth, are also important in determining welfare caseloads, as we show empirically in this study. Recognizing that welfare recipients face more substantial barriers to employment than those who typically have more education and skills, we constructed several macro-economic variables that reflect the education requirements of industries and the predominance of low-skilled workers hired by various two-digit sectors. Estimates based on a data set of annual time series observations aggregated to the state level suggest that these variables help in explaining welfare caseloads. More specifically, areas with higher concentrations of industries that hire welfare recipients and demand workers with higher education levels have higher caseloads. Based on a separate set of metropolitan-based estimates, we also found that gross job flows are positively correlated with welfare caseloads, with job destruction dominating the effects. While the two sets of results come from different types of estimation and for areas with different levels of aggregation, the results suggest that skill levels required of industries and the dynamics of the local labor market, which go beyond the typical measures of unemployment rate, help to explain the anomalies in changes in welfare caseloads during the past decade. The findings underscore that welfare recipients have barriers to employment that are different from the rest of the labor force and thus variables that more closely reflect their circumstances should be considered in explaining welfare caseloads. These findings are relevant to those attempting to predict caseloads at the national, state, or local level, in that it suggests that economic factors other than unemployment could be used to forecast welfare caseloads. In addition, the findings suggest that policies that can enhance net employment growth, reduce job volatility, and increase the educational credentials of welfare recipients may all help to reduce welfare caseloads.welfare, reform, industry, trends, Bartik, Eberts, labor, supply

A Frontline Decision Support System for Georgia Career Centers

The Workforce Investment Act (WIA) of 1998 emphasizes the integration and coordination of employment services. Central to achieving this aim is the federal requirement that local areas receiving WIA funding must establish one-stop centers, where providers of various employment services within a local labor market are assembled in one location. A major challenge facing staff in these centers is the expected large volume of customers resulting from relaxed program eligibility rules. Nonetheless, resources for assessment and counseling are limited. To help frontline staff in one-stop centers quickly assess customer needs and properly target services, the U.S. Department of Labor has funded development of a Frontline Decision Support System (FDSS). The FDSS is being pilot tested in the state of Georgia where one-stop centers are called Georgia Career Centers. Technical assistance on the project is being provided by the W.E. Upjohn Institute for Employment Research. FDSS is comprised of two main parts: 1) the systematic job search module, and 2) the service referral module. The systematic job search module is a means to undertake a structured search of vacancy listings. The module provides information about a customer's prospects for returning to a job like their prior one, provides a realistic assessment of likely reemployment earnings, identifies occupations related to the prior one, and screens job vacancy listings by region, occupation, and earnings requirements. The service referral module identifies the sequence of activities that most often lead to successful employment for clients with similar background characteristics. This paper documents the strategy and tools implemented to pilot test FDSS within the internet-based Georgia Workforce System. Pilot field operations in Georgia began in the Athens and Cobb-Cherokee Career Centers in July, 2002.Frontline, decision. Support, FDSS, Georgia, Eberts, O'Leary, Upjohn

A New WPRS Profiling Model for Michigan

The Worker Profiling and Reemployment Services (WPRS) system was established nationwide following the 1993 enactment of Public Law 103-152. The law requires state employment security agencies to profile new claimants for regular unemployment insurance (UI) benefits to identify those most likely to exhaust their regular benefits, and refer them to reemployment services to promote a faster transition to new employment. In November 1994, the Michigan Employment Security Commission (MESC) began profiling new UI claimants with technical assistance from the W. E. Upjohn Institute for Employment Research. Since WPRS profiling was introduced in Michigan much has changed, but the same model was in use until very recently. The MESC has been abolished, with UI now administered by the Michigan Bureau of Workers' and Unemployment Compensation (MBWUC). The process of taking UI claims has shifted from in-person interviews at local offices around the state to telephone claims taken by staff at three call centers to be located in Detroit, Grand Rapids, and Saginaw. Michigan has also changed from being a wage-request state for UI eligibility determination to a wage-reporting state. This means that each claimant's full benefit year UI entitlement is now known at the time that eligibility is established, a fact that permits new approaches to WPRS modeling. The MBWUC is also switching to using the new Standard Occupation Code (SOC) and North American Industrial Classification System (NAICS). Furthermore, UI has become a partner in new one-stop centers for employment services established in each workforce development area in the state as required by the Workforce Investment Act (WIA) of 1998. To develop a new Michigan WPRS profiling model which is in harmony with the new institutional realities, the MBWUC once again chose to partner with the W.E. Upjohn Institute for Employment Research. This brief paper offers a new WPRS model for Michigan which improves on the original model by applying lessons learned nationwide in the years since WPRS models were first implemented. A variety of alternative specifications were considered, the best of these was proposed as the new Michigan WPRS model. Michigan has since implemented this model and is now using it to profile UI claimants for referral to reemployment services promoting a speedy return to work.profiling, worker, WPRS, Michigan, model, Upjohn, Eberts, O'Leary

Structure, conduct, and performance in the local public sector

An examination of the relationship between the number of local governments within local labor markets and their expenditures, finding empirical support in both suburbs and central cities for the connection between the structure of the local public service market and its performance.Local government ; Competition

Reemployment and Earnings Recovery among Older Unemployment Insurance Claimants

The rate of involuntary job loss among older workers has increased in recent years. Previous research has found that after job separation older workers take longer to get back in jobs, and experience bigger earnings declines than younger prime age workers. These studies were based on surveys targeted at older and dislocated workers, which rely on retrospective interviews of strategic samples from the general labor force. Previous studies have not explicitly accounted for the availability of unemployment insurance (UI) benefits between jobs. This paper compares the adjustment to involuntary unemployment of older and younger prime age UI claimants, using a census of UI claimants constructed from records maintained for program administration in a large industrialized mid-western state. We compare subsequent labor market success of older UI claimants aged 50 years and over with younger prime working age claimants aged 30 to 49 following a claim for UI benefits during the major labor market contraction in 2001. We find that relative to their younger prime working age counterparts, older UI claimants return to work at lower rates, are less successful at returning to prior earnings levels, and have lower employment rates in the near term after reemployment. However, older workers who do gain reemployment after a UI claim maintain closer attachment to their new employers. The relative advantage for younger prime working age UI claimants in reemployment, earnings recovery, and subsequent employment is greatest in the first year after the claim for benefits. There is also evidence that both older and younger prime working age claimants who get back to work in the very first quarter after a UI claim have higher near term employment rates than those returning to work only one quarter later. Getting back to work quickly was also estimated to benefit older UI claimants by significantly raising the mean earnings recovery. No comparable earnings recovery was estimated for younger prime working age claimants who quickly returned to work.unemployment insurance, older workers, claimants, reemployment, o'leary

Employment and Training Policy in the United States during the Economic Crisis

This paper examines labor market conditions and public employment policies in the United States during what some are calling the Great Recession. We document the dramatic labor market changes that rapidly unfolded when the rate of gross domestic product growth turned negative, from the end of 2007 through early 2009. The paper reviews the resulting stress on labor market support programs and the broad federal response. That response came through modifications to existing programs and the introduction of new mechanisms to help Americans cope with job loss and protracted unemployment. The particular focus is on federally supported public programs for occupational job skills training and temporary income replacement. We also discuss procedures for evaluating the effectiveness of public reemployment efforts, and adjustments to these programs that were adopted during the crisis.job training, unemployment, unemployment insurance, employment policy, federal stimulus, American Recovery and Reinvestment Act, evaluation, performance measurement, net impacts, cream skimming, adjustment methodology