Experimental Evidence on Unemployment Insurance Work-Search Policies

Abstract

This paper describes findings from an experimental evaluation of alternative work-search policies in the Unemployment Insurance (UI) program. We find that the no work-search treatment significantly increased UI receipt, relative to the standard work-search approach, by 3.3 weeks and $265 per claimant, and that the treatment with the most intensive requirements reduced UI payments by one-half of a week or$70 per claimant. The results suggest that work-search requirements reduce UI spells by increasing the nonmonetary costs of remaining on UI, rather than enhancing job search abilities. We also find little treatment effects for wages, earnings, or total income, suggesting that an increase in the nonmonetary costs of continued UI receipt are associated with more intensive job search, rather than a reduction in the reservation wage.