This resource provides evidence on the efficacy of reemployment services during the Great Recession using data from the Nevada Reemployment and Eligibility/Reemployment Services (REA/RES) Program.
This paper examines the effectiveness of a random assignment design reemployment program that was implemented by the state of Nevada during the recent recession. The program required a random sample of new Unemployment Insurance (UI) recipients to attend a meeting at the start of their claim, in which they underwent a UI eligibility review and, if they passed the review, were offered an array of personalized reemployment services. Failure to show up or reschedule this interview disqualified them for further UI benefit payments. The program was found very effective in reducing average UI duration and producing UI savings. It also led to positive impacts on the probability of employment and on wages earned in the entire six-quarter period following UI entry. Program impacts are partly attributable to the effect of the mandatory interview, which reduced the moral hazard associated with UI benefit availability by pushing out new UI recipients who presumably were job ready or unwilling to actively search for work. But the results also show that program impacts are attributable to the fact that the services themselves were effective in expediting recipients’ reemployment and in helping recipients get relatively high-paying jobs.
(Abstractor: Author and Website Staff)
Full publication title: Are Reemployment Services Effective in Periods of High Unemployment? Experimental Evidence from the UI System
Major Findings & Recommendations
- Results show that the program reduced average UI duration by 3.4 weeks and average benefit amounts collected by $877. The savings produced by this reduction in benefit amounts was more than four times the average program costs, which shows that the program was a cost-effective intervention.
- The program’s impact on UI duration is partly attributable to the fact that some recipients did not attend the REA/RES meeting and were disqualified from receiving benefits in the first three weeks of their claims. This shows that the requirement to receive services pushed out UI recipients who did not face significant obstacles in getting reemployed and recipients who thought they would not pass the eligibility review.
- A small portion of the impact is attributed to the fact that a few recipients attended the meeting but failed the UI eligibility review either because they were deemed ineligible for benefits based on the work history or because they were not compliant with state work search requirements.
- Results also show that the program increased the probability of employment in each of the six quarters following UI entry. The impact on the probability of employment was 17 to 20 percent in the first two quarters after UI entry and, although it gradually declined over time, remained positive through six quarters after UI entry. These results are tied to the fact that the program pushed job-ready or ineligible recipients out of UI early in their claims, but are also attributable to the fact that the program services were effective in facilitating the quick reemployment of recipients.
- The program led to significant positive impacts on wages earned in each of the six quarters after UI entry, with recipients required to receive services earning $2,607 higher wages than their peers over the entire six-quarter follow-up period. Additional analyses show that the impacts on wages are not attributable solely to the program’s effectiveness in promoting the quick reemployment of recipients but also to the program’s success in helping recipients find relatively high-paying jobs.