Do bonus offers shorten unemployment insurance spells? results from the washington experiment

Christopher O'Leary, Robert G. Spiegelman and Kenneth J. Kline
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Robert G. Spiegelman: Executive Director Emeritus at the W. E. Upjohn Institute for Employment Research, Postal: Executive Director Emeritus at the W. E. Upjohn Institute for Employment Research
Kenneth J. Kline: Research Analyst at the W. E. Upjohn Institute for Employment Research, Postal: Research Analyst at the W. E. Upjohn Institute for Employment Research

Journal of Policy Analysis and Management, 1995, vol. 14, issue 2, 245-269

Abstract: Unemployment insurance is intended to reduce hardship by providing labor force members with partial wage replacement during periods of involuntary unemployment. However, in performing this income maintenance function, unemployment insurance may prolong spells of unemployment. Evidence from a field experiment conducted in Illinois in 1984 suggested that offering unemployment insurance claimants a modest cash bonus for rapid reemployment would increase the speed of return to work and reduce program costs. In 1988 a similar experiment, examining several different bonus offers, was conducted in the state of Washington. Evidence from the Washington experiment indicates that bonus offers do change job seeking behavior, but that only relatively generous bonus offers-about six times the weekly benefit amount-should be expected to significantly change the behavior of people eligible for unemployment benefits.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:14:y:1995:i:2:p:245-269

DOI: 10.2307/3325152

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