Reports findings from an impact study that tested different reemployment bonuses on Unemployment Insurance (UI) claimants’ employment outcomes and UI receipt and a benefit-cost analysis to determine if the bonuses were cost-effective from the perspective of society as a whole and the UI program specifically.

The UI “program provides short-term income support to involuntarily unemployed individuals while they seek work” (p.xv).  In the late 1980s, “the program [used] work-search requirements and employment-service referrals [to promote rapid reemployment]; however, [there was] policy interest…expressed in providing additional job-search assistance and other employment­ oriented services to UI claimants, including additional monetary incentives for claimants to seek work on their own….The Pennsylvania Reemployment Bonus Demonstration tested the effect of alternative reemployment bonuses on the reemployment and UI receipt of UI claimants….

The Pennsylvania Reemployment Bonus Demonstration was designed to test the effect of alternative parameters of a reemployment bonus offer, including the amount of the bonuses that are offered and the time period in which the bonus offer remains valid--the qualification period. It tested six treatments, or bonus-offer variations, according to a design in which eligible claimants were assigned randomly to the six treatments and to a control group that was not offered a bonus. The purpose of this random assignment design was to allow differences in the behavior of claimants in the treatment groups to be attributed to the effect of the treatments with a known degree of statistical precision” (p.xv).

“Demonstration-eligible claimants were selected and bonus offers were made between July 1988 and October 1989, a period in which the Pennsylvania economy was quite strong (employment was growing, and the average unemployment rate was 4.5 percent). Over this period, 15,005 eligible claimants were selected and assigned to treatment and control groups. Of these claimants, 14,086 signed for the waiting week or received a first payment and were thus eligible to receive a bonus offer if they were assigned to a treatment group. These claimants were located in 12 offices throughout the state. The 12 offices were selected randomly to represent the UI population in the state” (p.xvi).

(Abstractor: Author and Website Staff)