IDEAS home Printed from https://ideas.repec.org/p/upj/weupjo/91-08.html
   My bibliography  Save this paper

Congressional Testimony on the Effectiveness oof the Employment Service in Aiding UI Claimants

Author

Listed:
  • Louis S. Jacobson

    (W.E. Upjohn Institute for Employment Research)

Abstract

This testimony describes the results of a study of the Employment Service (ES) conducted by Dr. Jacobson and Prof. Arnold Katz of the University of Pittsburgh using data on over 100,000 individuals who registered with the Pennsylvania ES between 1978 and 1987, and an even larger sample of non-registrants. One major finding is that much of the decline in the ES's performance over the past thirty years can be explained by changes in: funding, characteristics of registrants, and characteristics of job vacancies. Thus, we concluded that criticism of the ES often ignores changes in crucial factors outside of the ES's control that reduced its effectiveness. A second major finding is that most criticism of the ES is based on the inappropriate assumption that the primary goal of the ES should be to maximize placements. The proper measure of ES benefits is how well it reduces joblessness, increases earnings, and reduces UI and welfare payments. We found that the ES reduced the average duration of unemployment of long-term UI claimants by nine weeks. This was for UI claimants who were unemployed for at least 30 weeks. But the ES reduced joblessness of claimants unemployed for 12 weeks by less than two weeks. This is evidence that the ES is most effective in aiding claimants who had substantial trouble finding work on their own. But we suspect that the jobs found with the help of the ES do not compare favorably with jobs held prior to becoming unemployed. Thus, we believe the ES primarily acts as a backstop preventing large earnings losses. Finally, although savings in UI benefits and increases in earnings created by the ES may be modest, the cost of ES service is so low, $75 on average, that modest benefits would more than offset those costs. We believe our results, coupled with similar findings from related studies, is sufficiently strong to warrant increasing the funding of the ES. That measure is favored because it would be at least budget neutral. In contrast, other measures to assist the long-term unemployed, such as providing extended UI benefits or training, would not come close to being budget neutral. In addition, $1 spent on job search assistance is likely to be more effective in helping claimants than $1 spent on training.

Suggested Citation

  • Louis S. Jacobson, 1991. "Congressional Testimony on the Effectiveness oof the Employment Service in Aiding UI Claimants," Upjohn Working Papers and Journal Articles 91-08, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:91-08
    as

    Download full text from publisher

    File URL: http://research.upjohn.org/cgi/viewcontent.cgi?article=1020&context=up_workingpapers
    Download Restriction: This material is copyrighted. Permission is required to reproduce any or all parts.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. repec:fth:prinin:242 is not listed on IDEAS
    3. Pissarides, C A, 1984. "Efficient Job Rejection," Economic Journal, Royal Economic Society, vol. 94(376a), pages 97-108, Supplemen.
    4. Kim B. Clark & Lawrence H. Summers, 1982. "Unemployment Insurance and Labor Force Transitions," NBER Working Papers 0920, National Bureau of Economic Research, Inc.
    5. Stephen A. Woodbury, 2009. "Unemployment," Chapters,in: Labor and Employment Law and Economics, chapter 17 Edward Elgar Publishing.
    6. Bruce D. Meyer, 1988. "Implications of the Illinois Reemployment Bonus Experiments For Theories of Unemployment and Policy Design," NBER Working Papers 2783, National Bureau of Economic Research, Inc.
    7. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, pages 968-979.
    8. Stephen A. Woodbury, 2009. "Unemployment," Book chapters authored by Upjohn Institute researchers,in: Kenneth G. Dau-Schmidt & Seth D. Harris & Orley Lobel (ed.), Labor and Employment Law and Economics, volume 2, pages 480-516 W.E. Upjohn Institute for Employment Research.
    9. Seater, John J, 1979. "Job Search and Vacancy Contacts," American Economic Review, American Economic Association, pages 411-419.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christopher J. O'Leary, 2004. "Evaluating the Effectiveness of Labor Exchange Services," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research.

    More about this item

    Keywords

    unemployment; insurance; employment; service; displaced; dislocated; Jacobson;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:upj:weupjo:91-08. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/upjohus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.