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Evaluating Pooled Evidence from the Reemployment Bonus Experiments

Listed author(s):
  • Paul T. Decker
  • Christopher J. O'Leary

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 Mathematica Policy Research in its series Mathematica Policy Research Reports with number 451a3004f93541d5a54c62bbd9e85f02.

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Handle: RePEc:mpr:mprres:451a3004f93541d5a54c62bbd9e85f02
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  1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
  2. repec:mpr:mprres:1134 is not listed on IDEAS
  3. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
  4. 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 458eec364eac40c390e6d78c9, Mathematica Policy Research.
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