Low Benefit Recipiency in State Unemployment Insurance Programs

Research Report

Low Benefit Recipiency in State Unemployment Insurance Programs

June 1, 2001

Abstract

This report studies interstate variation in the receipt of unemployment insurance (UI) benefits. Special attention was given to states with low UI recipiency. It reviews literature, documents the extent and persistence of interstate variation in recipiency and undertakes new research to explain the reasons for the observed variation. The research follows two approaches: 1) regression analysis of time series data on receipt of benefits in the individual states and 2) information gathered from site visits to nine states. The site visits included states with high recipiency and states with low recipiency.
Several different factors underlie the observed differences in UI recipiency: some reflecting contrasts in state labor markets and some related to aspects of UI program administration. Of the various administrative factors linked to low recipiency, particular importance was found for the rate of determinations over the issue of misconduct. Misconduct determination rates vary widely across states but states with high rates of determinations are characterized by 1) low application rates, 2) low repeat application rates and 3) low ratios of first payments to initial applications. In the analysis of UI benefit duration, more active monitoring of continuing claims was found to contribute to short benefit duration.

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