Income Replacement and Reemployment Programs in Michigan and Neighboring States

Stephen Woodbury

No 02-86, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: Governments in every developed industrial economy administer programs that partially replace the earnings of workers who suffer job loss or on-the-job injury. In addition, governments administer programs to help job losers gain reemployment, either through direct job placement (for those who are job-ready) or through retraining (for those who are not). This chapter describes and discusses current policy issues surrounding the main social insurance and reemployment programs in Michigan: Unemployment Insurance (UI), which partially replaces lost earnings following loss of a job; Workers' Compensation (WC), which pays for medical treatment, vocational rehabilitation, and lost earnings following a work-related injury or illness; and the cluster of reemployment and training programs that, since 1998, has come under the Workforce Investment Act (WIA). In addition to describing these programs, a main goal of the chapter is to offer a critical view of Michigan's programs by comparing them with corresponding programs in neighboring states. Discussion of these three programs could hardly be more timely. UI has come under attack for a range of alleged failings, and the Michigan legislature passed a bill in April 2002 that increased weekly benefits, lengthened benefit durations, and tightened the eligibility requirements for UI in Michigan. Also, the Workforce Investment Act of 1998 has resulted in significant changes in reemployment services nationwide as well as in Michigan, and there is continuing debate over the effectiveness of the "work first" approach that WIA entails. Finally, WC has gone through cycles in which dramatic cost increases have been followed by efforts at cost containment. Michigan's WC law has seen only minor changes during the last 20 years because reforms instituted in the early 1980s appear to have kept both medical and wage replacement costs of WC in Michigan in line with those in other states. However, health care costs are projected to resume their growth in the near future, which would directly affect WC costs and put increased pressure on the WC system.

Keywords: unemployment insurance; workers' compensation; income; replacement; Woodbury; Upjohn (search for similar items in EconPapers)
JEL-codes: H25 H77 J24 J28 J32 J38 J65 (search for similar items in EconPapers)
Date: 2002-10
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://research.upjohn.org/cgi/viewcontent.cgi?art ... ext=up_workingpapers (application/pdf)
This material is copyrighted. Permission is required to reproduce any or all parts.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:upj:weupjo:02-86

Access Statistics for this paper

More papers in Upjohn Working Papers from W.E. Upjohn Institute for Employment Research 300 S. Westnedge Ave. Kalamazoo, MI 49007 USA. Contact information at EDIRC.
Bibliographic data for series maintained by ().