John Courtney | President
August 10, 2023
In the wake of the Covid-19 pandemic, our nation has been undertaking an historic modernization of UI systems. While these updates are critical, it’s apparent from the data that we must also modernize our nation’s reemployment systems.
Unemployment Insurance Exhaustees
Even as we’ve experienced unemployment rates near 50-year lows, with more jobs than job-seekers—the need is great. As of June, UI claim duration was still over three months (14.1 weeks) and the exhaustion rate was 34.5%. Last year was only slightly better, but still saw nearly 1 in 3 unemployment claimants exhausting all of their benefits without landing a job in 2022.i This means, in many states,ii a third of claimants became long-term unemployed in one of the strongest US labor markets on record. Meanwhile, employers have been experiencing an historic labor shortage.
Clearly, the time is ripe to modernize UI work search requirements to better engage and empower job seekers so they can avoid the many poverties of long-term unemployment.
Five Ways to Modernize Work Search
Let’s look at five promising ways states are bringing UI work search policies up to 21st century speed.
1. Early Engagement. Many states mistakenly wait a week or more after UI claim application before fully engaging unemployed workers in meaningful work search activities. Many require applicants to apply for jobs, which in most cases is a highly unverifiable activity and for the average unprepared job seeker, can be counterproductive. Few require any truly provable work search activities.
Research shows the likelihood of landing a job in a given month drops sharply by the end of two months, possibly due to skill loss, discouragement, etc. The first two months are thus a critical time to equip all claimants for job search.
Leading states not only ensure claimants register in their employment services system early and submit a basic resume or work history, they also require them to become familiar with available job search resources, and require them to submit an “enhanced” resume so the state can send weekly job openings matching their background.
But beyond the reemployment impact of early engagement perhaps equally compelling is that states can more than double the number of unemployed they engage and impact if they target their efforts more strongly in the first week after application for benefits. This is because two to three times as many people apply for unemployment benefits compared to those who receive them.
Who are these unemployed applicants who never get a UI check? Some land jobs quickly, but many are ineligible due to lack of base period wages, or because they were not laid off, but instead quit or were fired for cause. This suggests many of those not engaged tend to be those most in need – workers with lower income, savings and education and with greater barriers to landing their next job.
Leading states engage applicants immediately, while they have their attention – that is, while the applicant has hope of a financial reward for completing work search requirements.
2. Types of Activities—The Four V’s. In setting requirements, best-practice states focus on job search activities that are valuable, varied, virtual and verifiable.
Valuable. High-evidence studies on the most valuable activities are somewhat scarce, but a few offer solid guidance. One meta-study found job-seekers gain the most from focusing on two things: becoming more proactive and enhancing job search skills. Many varied activities move the needle on these two essentials, and they’re available in person and online.
Varied. The age-old single strategy of requiring weekly employer contacts too often puts poorly-prepared claimants in the position of facing immediate and repeated rejections from their best network prospects. This often saps their morale and heightens their fear of job search.
Because job search is often a multi-month quest, it’s important that job seekers pursue a variety of activities that state UI policy can require and encourage, from career assessments and resume-writing to mock interviews and reviewing matched job openings.
Verifiable. Confirming job search activity is critical, as it allows work search requirements to be accurately and consistently enforced. To maximize claimant motivation and proactivity, leading states institute indefinite suspension of benefits for noncompliant UI claimants.
By choosing verifiable work search activities, states can minimize a leading category of overpayments—work search-related overpayments. Not only will trackable work search activities help valid claimants engage, they can stop fraudsters who are less likely to build a resume or complete an online or in-person workshop.
Virtual. Covid-19 pushed many of life’s activities into the “virtual” world, and workforce programs were no exception. For example, the U.S. Department of Labor began allowing virtual Reemployment Services and Eligibility Assessments (“RESEAs”), and states have widely adopted this more nimble approach to serve job-seekers.
RESEA’s scheduled funding increase for 2024 was recently held back, but if Congress continues with the original funding plan, the program will grow to $750 million by FY 2027. Naturally, states are taking more interest in how the program can be optimized. One idea that’s gaining momentum is to not only continue to make counseling virtual when appropriate, but also to provide other elements of RESEA and reemployment activities online (and early), such as orientations and creating an initial job search plan.
In its January 2021 UI Program Letter 13-21, DOL noted that “States are also encouraged to leverage virtual service delivery tools that allow portions of the RESEA sessions to be automated and accessed through self-service.” DOL indicated that one example of “a virtual service-delivery tool is the ‘Online Work Registration and Assessment’ that was developed by Utah.” The Utah Department of Workforce Services’ virtual service delivery tool requires claimants to create a profile in the state labor exchange, answer questions about their reemployment needs and complete assigned online workshops to continue their claims.
DOL’s letter offered other examples of virtual service tools:
- Pre-recorded orientations to American Job Center services
- Online registration
- Assessment tools that help UC claimants prepare for the initial RESEA meeting
The agency added: “These virtual service delivery tools should be designed to increase RESEA program efficiencies, enhance the participants’ experience with RESEA services, complement the resources and services provided during the initial or subsequent RESEA meetings, and massively expand the number of customers who can be served under the RESEA program.” It also included a list of other virtual tools.
Beyond RESEA. Since 2016, DOL has been promoting a variety of work search activities—including virtual activities. DOL outlined many of these in its Pathway to Reemployment Framework paper. In addition to searching for and applying jobs online, states that have modernized their work search activity policies give claimants credit for online workshops, using LinkedIn’s platform, skills and other assessments, completing activities in Geographic Solutions’ set of tools, etc.
3. Amount of Activity. It’s often said that a proper job search is a full-time job. While many argue it should be 40 hours per week, monitoring 40 hours of activity isn’t feasible. Fortunately, requiring as few as three to five activity-hours per week can nudge claimants over the hump toward a habit of engaging in a proactive set of activities every week.
For example, in 2011, Utah DWS piloted the idea of online workshops and studied how claimants react to a specific work search requirement activity level. In addition to claimants’ normal employer contact requirements, claimants were required to complete four online workshops in two weeks (taking about one to two hours to complete) to continue receiving benefits. In the initial pilot study of over 500 participants, claimants not only completed the workshops, but went on to complete 36% more workshops than required.
Utah has continued the self-serve online workshop approach, as noted above, with similar results in increased claimant activity levels. It appears that once claimants can clearly see their job search skill gap and a means to fill it, they become motivated to do more on their own.
4. Nudging. Not all work search activities can be tracked—for example, contacting employers and networking in person. However, these activities are valuable and should be encouraged. Tapping behavioral science, states can reinforce the value of these activities while designating them as suggested or non-mandatory, thus avoiding integrity issues arising from an inability to verify them.
For example, states can make impact by telling job-seekers that increasing job search skills by doing the right activities can increase their odds of landing by over 60%iii, or by sharing a statistic on what other job-seekers do to be successful. Other examples of nudging include systems that automatically email selected job leads to claimants based on their work history and skills.
5. Effective Notification of Requirements. It’s critical that claimants understand what they must do to comply with work search requirements. Though a single letter at the start of a claim or a notice through a state’s online UI account system may officially notify claimants, it may not create true understanding and prompt desired actions.
Leading states take advantage of modern communication techniques, such as well-timed, well-worded reminders via automated calls, texts and emails. They also realize that “one-and-done” is not enough and instead repeat messages to ensure they reach claimants. Some states have cut RESEA no-show rates by nearly a third with simple email reminders. Other states have made gains with timely phone calls.
In Michigan, only 43% of claimants were completing mandatory Reemployment and Eligibility Assessment (REA) meetings. The state worked with Mathematica, W.E. Upjohn Institute and DOL to craft a simple set of email notification timed to arrive before the scheduled meeting.iv These nudges immediately increased the REA completion rate from 43% to 57%. With similar strategies, Connecticut also reported a significantly increase in RESEA show-rates.
Self-scheduling is another best practice that has rapidly grown, letting claimants find a time that works well in their schedule to attend, for example, a RESEA meeting—rather the state dictating a day and time based on the next available slot. Self-scheduling makes the fulfillment of work search requirements a collaborative endeavor. Ohio used reminder calls 24 to 48 hours prior to the initial appointment, plus a scheduling hotline and a self-scheduler, to increase its RESEA show rate from 27% to 76%, one of the strongest in the nation.
Conclusion
There are more ways to enhance work search policy, but states that embrace these five policy points will realize a significant improvement in UI claimant reemployment and work search integrity. States already excelling in some or all of these strategies include Utah, Wisconsin and Nebraska.
While our post-pandemic nation continues to struggle with longer-than-expected unemployment spells, the time is ripe to modernize work search. These best practices will not only help us serve millions of job seekers today, but put us in a stronger position to contend with future bouts of cyclical unemployment.
John Courtney is President of the American Institute for Full Employment. For the past 25 years, the Institute’s team of consultants has worked with 25 states and Congress to develop evidence-based reemployment solutions in unemployment insurance, welfare and workforce programs. To learn more or apply for a free assessment of your state’s reemployment programs, including RESEA, contact us at info@fullemployment.org.
This article was updated from an earlier AIFE publication.
iThe national average exhaustion rate in 2022 was 32%. U.S. Department of Labor Employment and Training Administration Quarterly Data Summary Q1-Q4 2022.
iiIn some states the maximum number of weeks claimants can claim UI before is lower than 26 weeks. In those states, exhaustion of the state limit is not synonymous with long-term unemployment (26 weeks). However, as a nation, UI claim duration underestimates average weeks unemployed (for claimants and non-claimants) which was over 20.6 weeks in July (https://fred.stlouisfed.org/series/UEMPMEAN).
iii“Effectiveness of Job Search Interventions: A Meta-Analytic Review”, Psychological Bulletin, Liu, Songqi; Huang, Jason L.; Wang, Mo 2014 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2632318
iv“Simple Encouragement Emails Increased Take-Up of Reemployment Program (Brief),” Mathematica Policy Research, Matthew Darling & Christopher O’Leary & Irma Perez-Johnson & Jaclyn Lefkowitz & Ken Kline & Ben Damerow & Randall Eberts & Samia Amin & Greg Chojnacki, May 31, 2017.