Christopher J. O'Leary () (W.E. Upjohn Institute for Employment Research) Paul T. Decker (Mathematica Policy Research, Inc.) Stephen A. Wandner (Employment and Training Administration, U.S. Department of Labor)
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Targeting reemployment bonus offers to unemployment insurance (UI) claimants identified as most likely to exhaust benefits is estimated to reduce benefit payments. While earlier research indicated that non-targeted reemployment bonus offers would not be good public policy, in this paper we show that targeting bonus offers with profiling models similar to those in state Worker Profiling and Reemployment Services (WPRS) systems can improve their cost effectiveness. Since estimated average benefit payments do not steadily decline as the eligibility screen is gradually tightened, we find that narrow targeting is not optimal. The best candidate to emerge for a targeted reemployment bonus is a low bonus amount with a long qualification period, targeted to the half of profiled claimants most likely to exhaust their UI benefit entitlement.
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Paper provided by W.E. Upjohn Institute for Employment Research in its series Staff Working Papers with number
03-51.
Length: Date of creation: Jan 2003 Date of revision: Handle: RePEc:upj:weupjo:03-51
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Find related papers by JEL classification: J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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