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Personal Reemployment Accounts: Simulations for Planning Implementation
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Abstract
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 3,000tofinancereemploymentactivities.Accountfundscouldbeusedtopurchaseintensive,supportive,andjobtrainingservices.AnyfundsremaininginthePRAcouldbepaidasacashbonusforreemploymentwithin13weeks,ordrawnasextendedincomemaintenanceforexhausteesofregularUIbenefits.PersonalreemploymentaccountofferswouldbetargetedtoUIbeneficiariesmostlikelytoexhausttheirUIentitlementsusingstateWorkerProfilingandReemploymentServices(WPRS)models.Thedraftlegislationcalledforabudgetof3.6 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