• This study will analyze states' approaches to financing deficits in their Unemployment Insurance (UI) trust funds. The project will describe implementation of the diverse and complex Federal and state statutes and policies which regulate the process of obtaining and administering funds, based on document reviews and interviews with state and Federal staff and professionals in the finance industry. Based on these findings, the project will develop a simulation model to estimate and compare costs associated with different financing options and approaches. The project will leverage the model to simulate a variety of economic and deficit conditions to draw broad inferences about the types of outcomes that different financing approaches can produce.

Research Questions:

  • What are the decision-making factors for selecting a method to finance deficits in UI programs? To what extent does available information about local economic conditions, states' UI trust fund solvency, and/or prior experience with borrowing appear to influence states' approaches?
  • What are the estimated costs associated with different methods and configurations of borrowing instruments used for obtaining funds to finance deficits in UI programs?

Project Duration: 42 Months

Contract End Date: March 2021

Contractor: Urban Institute

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The Department of Labor's (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy. CEO’s research development process includes extensive technical review at the design, data collection and analysis stage, including: external contractor review and OMB review and approval of data collection methods and instruments per the Paperwork Reduction Act (PRA), review by academic peers (e.g., Technical Working Groups), and inputs from relevant DOL agency and program officials and CEO technical staff. Final reports undergo an additional independent expert technical review and a review for Section 508 compliance prior to publication. The resulting reports represent findings from this independent research and do not represent DOL positions or policies.