Effects of the Unemployment Insurance Work Test on Long-Term Employment Outcomes
Posted: 7 Oct 2016
Date Written: August 4, 2016
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
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