Effects of the Unemployment Insurance Work Test on Long-Term Employment Outcomes

Posted: 7 Oct 2016

See all articles by Marta Lachowska

Marta Lachowska

W.E. Upjohn Institute for Employment Research; Stockholm University - Department of Economics

Merve Cebi

University of Massachusetts Dartmouth

Stephen Woodbury

Michigan State University; W.E. Upjohn Institute for Employment Research

Date Written: August 4, 2016

Abstract

Does requiring job seekers to be available and searching for work affect job quality? We examine the effects of this unemployment insurance (UI) work test on long-term employment outcomes. Adding administrative wage records to the Washington Alternative Work Search (WAWS) experiment, we examine effects on earnings, hours worked, employment, and job match quality in the nine years following the experiment. Among UI recipients as a whole, the effects of the work test were negligible, counter to the hypothesis that the work test may harm long-term earnings. But for permanent job losers, the work test reduced time to reemployment by 1–2 quarters, and increased job tenure with the first post-claim employer by about 2 quarters. Also, we find that the work test selected lower-wage workers into reemployment. Accordingly, the work test may be an important policy for improving the reemployment prospects of lower-wage, permanent job losers.

Keywords: Unemployment insurance, Work test, Random-assignment experiment, Pre-treatment outcome tests, Reemployment policy, Long-term evaluation of public policy, Administrative data

JEL Classification: C21, C93, I38, J18, J38, J64, J65, J68

Suggested Citation

Lachowska, Marta and Cebi, Merve and Woodbury, Stephen, Effects of the Unemployment Insurance Work Test on Long-Term Employment Outcomes (August 4, 2016). Labour Economics, Vol. 41, No. August, 2016. Available at SSRN: https://ssrn.com/abstract=2847694

Marta Lachowska (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

HOME PAGE: http://www.upjohn.org/AboutUs/Staff/Lachowska

Stockholm University - Department of Economics ( email )

Stockholm University
Stockholm, 10691
Sweden

HOME PAGE: http://www2.sofi.su.se/~mla/

Merve Cebi

University of Massachusetts Dartmouth ( email )

Stephen Woodbury

Michigan State University ( email )

East Lansing, MI 48824
United States
517-355-4587 (Phone)
517-432-1068 (Fax)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States
269-343-5541 (Phone)

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