Unemployment Insurance (UI) Administrative Costs Study
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About the Study
In 2023, the Chief Evaluation Office (CEO) partnered with the Employment and Training Administration, to contract with Abt Global and Needels Consulting, to conduct the Unemployment Insurance (UI) Administrative Costs Study under the Reemployment Services and Eligibility Assessments (RESEA) Evidence Building Portfolio Project of studies. The study aims to better understand how the costs to administer, operate, maintain, and improve state unemployment insurance programs change over time and in different economic conditions.
Operated through a partnership between the federal government and state agencies, the UI program is a social insurance program intended to provide temporary financial assistance to eligible individuals who have lost employment through no fault of their own. Each state designs and operates their own UI program within a federal-state partnership. Financing for UI reflects this partnership; states fund UI benefit payments primarily through employer taxes and rely on federal funding to cover the costs of program administration.
This Department of Labor-funded study was a result of DOL’s interest in learning whether the structure of UI administrative financing could be improved to bolster state UI programs’ capacity to respond to unforeseen increases in claims, such as those that occurred due to the COVID-19 pandemic. It contributes to the evidence-base to inform Unemployment Insurance programs and policies and addresses Departmental strategic goals and priorities.
- What challenges have been cited about the current approach to funding UI administrative costs, especially during times of unexpected increases in UI claims, and what alternative funding mechanisms or structures have been proposed?
- How has federal UI administrative funding, as measured by annual federal administrative allocations, compared to UI administrative costs, as recorded in states’ annual Resource Justification Model (RJM) data submissions?
- How have differences between federal UI administrative funding and UI administrative costs varied over time and across states?
- Are there characteristics of states or state UI programs that seem to correlate with differences between federal UI administrative funding and UI administrative costs?
- Unemployment Insurance Administrative Funding and Costs: A Literature Review (Literature Review, January 2025)
Project Duration: 24 Months
End Date: December 2025
Contractor: Abt Global, in partnership with Needels Consulting
For More Information: ChiefEvaluationOffice@dol.gov
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 and CEO’s research development process.