The Washington Reemployment Bonus Experiment Final Report
Spiegelman, Robert G.
W.E. Upjohn Institute for Employment Research
The principal objective of unemployment insurance is to reduce hardship by providing labor force members with partial wage replacement during periods of involuntary unemployment. In performing this income maintenance function, UI has the potential of prolonging spells of unemployment. Indeed, leading economists began publishing research findings in the 1970s strongly suggesting that UI tends to lengthen jobless spells beyond that which would occur without UI payments. The 1980s saw several state federal experiments, testing initiatives designing to reduce work disincentives while retaining the income maintenance functions of UI. A new program, offering bonus payments to UI claimants for speedy return to work, was tested in experiments run in Illinois in 1984-85 and in New Jersey in 1986-87. The apparent success of these experiments in reducing insured unemployment led to U.S. Department of Labor to launch versions of these bonus offer experiments in Washington and Pennsylvania in 1988. The purpose of the Washington Reemployment Bonus experiment was to validate results of the previous experiments, test a new range of reemployment bonus plans, and identify the most cost effective plan. WREB was designed by the W.E. Upjohn Institute for Employment Research in collaboration with the Washington States Employment Security Department and the USDOL.