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Office of the Assistant Secretary for Policy (OASP)

Evaluation of the Unemployment Compensation Provisions of the American Recovery and Reinvestment Act of 2009

Overview

The American Recovery and Reinvestment Act of 2009 (ARRA) added several provisions with regard to Unemployment Compensation including: (1) extensions of the number of weeks that UI is available through Emergency Unemployment Compensation (EUC) and temporary 100% federal funding of most extended benefit (EB) costs; (2) an additional UI compensation increase of $25 per week for all three programs; (3) receipt of the first $2,400 of UI benefits free of federal income taxation; (4) temporary suspension of interest payments on all state trust fund advances (loans); and (5) UI modernization.1 This evaluation would provide valuable evidence of the role and effects of all the UC provisions under the ARRA in assisting unemployed workers and the challenges states faced in the implementation of those provisions. The study would help the Department of Labor understand how changes in the replacement rate, eligibility and potential duration have worked in order to be able to apply the lessons learned to future legislative initiatives for such programs. Three reports will be produced under the evaluation. The first paper will focus on the UI Modernization provisions covering the factors affecting the states' decision-making, the implementation implications, and the characteristics of the claimants affected. The second paper will examine the extended benefit provisions (EB and EUC) exploring the factors affecting the states' decision-making, the implementation implications, and the characteristics of the claimants affected. The third paper will focus on the impacts of the ARRA provisions on claimants.

Goals

For each of the changes to the UC system, four primary research questions will be addressed:

  • For the provisions that allowed state choice, how did states make their decisions and what factors affected the outcome of the decision making process?
  • What were the implications of State decisions on implementation of the new provisions?
  • What were the characteristics of the claimants that were affected?
  • What were the impacts of the provisions?

Tasks

To address the previous research questions, both qualitative and quantitative data collection and analysis tasks will be conducted. These tasks include:

  • Collecting and analyzing UI claimant and wage records on all workers in 20 to 30 states.
  • Conducting a nationally representative survey of UC claimants to determine extended-UI-program and post-UI experiences of the respondents.
  • Conducting site visits and organizational surveys (by phone or paper) to selected states. The selection of sites and data collection methods will focus on the wide range of state experiences and factors that shaped claimant outcomes, so as to learn in greater detail how some of the more promising strategies were implemented.
  • Analyzing various data sources to provide complete detailed descriptions of each state's plans, goals, implementation experience, and staffing activities for administering these UI program changes.


Key Information

The period of performance of this evaluation is 36 months. The overall budget for the evaluation is $3.5 million. The evaluation contractor is Mathematica. For more information on this evaluation please contact Jonathan Simonetta at simonetta.jon.a@dol.gov.


Footnotes

1UI Modernization was structured as an incentive to encourage states to adopt specific provisions that increase access to benefits for certain segments of the unemployed population. States are eligible to receive their share of a $7 billion UI Modernization Incentive Payment if they include provisions in their state UI laws that address specified areas. A state with an Alternative Base Period (ABP) can receive 1/3 of its portion if it enacts (or already has in place) an ABP, and it can receive the remaining 2/3 if, in addition, it enacts (or already has in place) any two of the following four provisions: 1) UI eligibility for part-time workers, 2) UI eligibility for persons who quit for certain compelling family reasons, 3) Providing to eligible beneficiary a dependents' allowance of at least $15 per dependent per week in addition to regular benefits, and 4) Providing an additional 26 weeks of UC to exhaustees who are enrolled in and making satisfactory progress in certain training programs.