Evaluating Pooled Evidence from the Reemployment Bonus Experiments
Upjohn Institute Staff Working Paper 94-28
Paul T. Decker and Christopher J. O'Leary
NOTE: A revised version of this paper appears in Journal of Human Resources 30(3): 534-550, Summer 1995.
Abstract
Social experiments conducted in Pennsylvania and Washington tested the effect of offering
Unemployment Insurance (UI) claimants a cash bonus for rapid reemployment. This paper
combines data from the two experiments and uses a consistent framework to evaluate the
experiments and determine with greater certainty the extent to which a reemployment bonus
can affect economic outcomes. Bonus offers in each of the experiments generated statistically
significant but relatively modest reductions in UI receipt. Since the estimated impacts on UI
receipt were modest, the reemployment bonuses did not generate the UI savings necessary to
pay for administering and paying the bonuses. Hence, contrary to earlier findings from a
bonus experiment conducted in Illinois, findings from the Pennsylvania and Washington
experiments strongly suggest that a reemployment bonus is not a cost-effective method of
speeding the reemployment of UI claimants.
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