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Evaluating Pooled Evidence from the Reemployment Bonus Experiments

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Abstract

Social experiments conducted in Pennsylvania and Washington tested the effect of offering Unemployment Insurance (UI) claimants a cash bonus for rapid reemployment. This paper combines data from the two experiments and uses a consistent framework to evaluate the experiments and determine with greater certainty the extent to which a reemployment bonus can affect economic outcomes. Bonus offers in each of the experiments generated statistically significant but relatively modest reductions in UI receipt. Since the estimated impacts on UI receipt were modest, the reemployment bonuses did not generate the UI savings necessary to pay for administering and paying the bonuses. Hence, contrary to earlier findings from a bonus experiment conducted in Illinois, findings from the Pennsylvania and Washington experiments strongly suggest that a reemployment bonus is not a cost-effective method of speeding the reemployment of UI claimants.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number ptdcjo1995.

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Handle: RePEc:upj:weupjo:ptdcjo1995

Note: Appears in Journal of Human Resources 30(3): 534-550
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Keywords: unemployment insurance; bonus experiments; ui;

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  1. Paul T. Decker & Christopher J. O'Leary., 1991. "An Analysis of Pooled Evidence From the Pennsylvania and Washington Reemployment Bonus Demonstrations," Mathematica Policy Research Reports 1134, Mathematica Policy Research.
  2. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
  3. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
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