Does the Work Test Work?

In the United States, “to be eligible for UI benefits, a claimant initially needs an adequate work history and must have lost her job through lack of work and no fault of her own. In addition, to remain eligible, the worker must be “able, available, and searching” for work—that is, must satisfy the work test.” A 2016 study[ref]An earlier, ungated version can be found here.[/ref] “examine[s] effects on earnings, hours worked, employment, and job match quality in the nine years following the experiment. Among UI recipients as a whole, the effects of the work test were negligible, counter to the hypothesis that the work test may harm long-term earnings. But for permanent job losers, the work test reduced time to reemployment by 1–2 quarters, and increased job tenure with the first post-claim employer by about 2 quarters. Also, we find that the work test selected lower-wage workers into reemployment. Accordingly, the work test may be an important policy for improving the reemployment prospects of lower-wage, permanent job losers.”

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