Personal Reemployment Accounts:

Simulations for Planning Implementation

May 2004

Christopher J. O’Leary and Randall W. Eberts

W.E. Upjohn Institute for Employment Research

300 South Westnedge Avenue

Kalamazoo, Michigan 49007

Tel: 269-343-5541 

Fax: 269-343-3308

oleary@upjohn.org 

eberts@upjohn.org 

This report is delivered to the U.S. Department of Labor under grant number G-7401-9-00-87-

60. We thank Ken Kline for expert research assistance. Paul Decker, John Lawrence, Helen

Parker, Stephen Wandner, and Stephen Woodbury gave us useful suggestions. Clerical

assistance was provided by Claire Black and Phyllis Molhoek. Opinions expressed are our own

and do not necessarily represent those of the W.E. Upjohn Institute for Employment Research. 

We accept responsibility for any errors. 
i

Personal Reemployment Accounts:

Simulations for Planning Implementation

Table of Contents

Section Page

Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

1. Introduction ............................................................1

2. PRAs under HR 444 ......................................................3

3. The Sample and Services Chosen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4. Prices for Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5. A Choice Model for PRA Simulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

6. PRA Participant Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

7. Targeting PRA Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

8. State-Wide Simulation Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

9. Sub-State Budget Allocation Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

10. Summary and Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Appendix

A A Spreadsheet for Simulations of Alternative Personal Reemployment 

Account Designs at the Sample Means . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ii

LIST OF TABLES

Table 1 Summary of Sample Size for PRA Analysis

Table 2 Intensive, Supportive, and Training Service Usage During the First 13 weeks and

the Remainder of the UI Benefit Year Georgia UI Claimants July 1, 2000 to

September 30, 2001

Table 3 State-wide Service Participation Rate Summary

Table 4 State-wide Service Participation Rate Summary for Top 30 Percent of Profiling

Scores

Table 5 Prices for Intensive, Supportive, and Training Services

Table 6 UI and Demographic Summary by Bonus Qualification / Service Receipt Group

Table 7 UI and Demographic Summary by Bonus Qualification / Service Receipt Group

for the Top 30 Percent of the Profiling Distribution

Table 8 Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario, All

Features

Table 9 Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario Bonus

and Purchase Services

Table 10 Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario, Bonus

Only

Table 11 Average cost per PRA offer and total number of potential PRA offers over two

years given the Georgia PRA budget 

Table 12 Net Present Value (NPV) of Alternative PRA Use Choices

Table 13 Distribution of State PRA Budget Allocation to Service Delivery Regions (SDR)

Table 14 Service Delivery Region Top Percentages of Profiling Distribution to Receive

PRA Offers to Exhaust Budgets Based on the State-wide Profiling Distribution

Table 15 Service Delivery Region Top Percentages of Profiling Distribution to Receive

PRA Offer to Exhaust Budgets Based on the within-SDR Profiling Distribution

LIST OF FIGURES

Figure 1 Matrix of Costs and Benefits for PRA Participants

Figure 2 Employment Status in PRA Time Periods

Figure 3 Employment and Services Use Status in PRA Time Periods
iii

Personal Reemployment Accounts:

Simulations for Planning Implementation

Abstract

The proposed Back to Work Incentive Act of 2003 recommended personal reemployment

accounts (PRA) that would provide each eligible UI (unemployment insurance) claimant with a

special account of up to $3,000 to finance reemployment activities. Account funds could be used

to purchase intensive, supportive, and job training services. Any funds remaining in the PRA

could be paid as a cash bonus for reemployment within 13 weeks, or drawn as extended income

maintenance for exhaustees of regular UI benefits. Personal reemployment account offers would

be targeted to UI beneficiaries most likely to exhaust their UI entitlements using state Worker

Profiling and Reemployment Services (WPRS) models. The draft legislation called for a budget

of $3.6 billion for PRAs, with the money to be committed over a two-year period. This report

provides a simulation analysis of questions relevant to implementation of PRAs by states. The

analysis is done using data for the state of Georgia. Simulations rely on recent patterns of

intensive, supportive and training services use. Simulations for alternative rules setting the PRA

amount and varying behavioral responses are examined. Like the legislative proposal, simulated

PRA offers are targeted using Worker Profiling and Reemployment Services (WPRS) models. 

The key question examined is, how many PRA offers can a state make given a fixed budget? 

Proposed and alternative rules for sub-state budget allocation are also examined. The framework

presented in this paper allows the exploration of several behavioral responses to incentives

created by the PRA. 
iv

Personal Reemployment Accounts:

Simulations for Planning Implementation

Executive Summary

Proposed legislation called the Back to Work Incentive Act of 2003 introduced a new

model for customer choice among publicly funded reemployment services. The Bush

administration recommended a two-year federal budget of $3.6 billion to provide each eligible

unemployment insurance (UI) claimant a personal reemployment account (PRA) of up to $3,000. 

Personal reemployment account funds could be used for three things: 1) to purchase

reemployment services, 2) as a reemployment bonus, and 3) as extended income maintenance for

exhaustees of regular UI benefits. Personal reemployment account offers would be targeted to

UI beneficiaries most likely to exhaust their UI entitlements using state Worker Profiling and

Reemployment Services (WPRS) models. 

If PRAs are enacted, core services at one-stop career centers would remain free to all

customers, but PRA recipients wishing to use intensive, supportive, and job training services

would be required to use account funds to purchase them from a qualified public or private

vendor. Additionally, PRA recipients who return to work within 13 weeks of their UI claim date

may receive the unused balance in the PRA as a cash reemployment bonus. Sixty percent of the

balance would be paid upon reemployment with the remainder payable after six months steady

employment. Those failing to gain reemployment and exhausting regular UI entitlement could

draw support payments from their PRAs at the rate of their weekly benefit amounts (WBAs). 

The PRA proposal combines several employment initiatives in an innovative way, but

legislation authorizing PRAs has not yet been enacted. However, the proposal remains active

and has the president’s continued support. The W.E. Upjohn Institute has investigated aspects of
v

how the proposed PRAs would work under a grant from the U.S. Department of Labor. The

Institute conducted PRA simulation analyses using a unique data set for the state of Georgia

linking UI claims and employment services records. To be forward looking, our simulations

used the new WPRS model now being implemented in Georgia. 

PRA Budgets and Service Prices

The proposed $3.6 billion for PRA enrollments over two years requires funds be

distributed to states in proportion to their share of national unemployment. Based on 2002

unemployment figures Georgia’s share would be 2.37 percent or $85.32 million. The proposal

also requires that PRA funds be allocated within states in proportion to regional shares of state

unemployment. Given that offers are to be targeted using WPRS scores to those most likely to

exhaust their benefit entitlement, nearly all offers would be made to UI claimants in the top 30

percent of the state WPRS distribution of claimant scores. Consequently, we focus our

simulations on that group of claimants. 

Since the simulation analysis required monetary values for services, hypothetical prices

were set based on statewide service expenditures, service usage rates, and relative valuations for

services. Based on our sample for analysis, Table E.1 summarizes imputed prices for services as

well as usage rates during the two PRA relevant time periods: the first 13 weeks and the

remaining 39 weeks in the UI benefit year. In addition to supportive and training services,

Georgia one-stop centers offer five types of intensive services. The most popular intensive

services among those potentially eligible for a PRA are customer service plan and counseling.

The table shows that among those profiled, 18.9 and 20.3 percent of claimants used these

services during the first 13 weeks. The table further shows that the bulk of service use occurs in
vi

that earlier time frame. Relatively small proportions of UI claimants use either supportive or

training services, which are imputed to be most costly.

PRA Simulations

Our simulations focus on estimating the average expected cost per $3,000 PRA offer, and

the number of offers possible over two years given the budget. Estimates of these magnitudes

are critical for states planning for PRA enrollment over a two-year cycle. The simulations also

provide evidence on the pattern of service use, bonus receipt, and income maintenance payments

likely to result under PRAs. 

To span the range of possible responses to PRA offers, our simulations include a baseline

of no change in behavior regarding service use and UI benefit receipt, as well as impacts

shortening UI duration by 1 and 2 weeks. These alternatives encompass the range of responses

observed in the UI reemployment bonus experiments (Robins and Spiegelman 2001). The

simulation grants a first bonus payment for UI duration of less than 13 weeks, and a second

bonus payment when there are also positive earnings in the first and third quarters following the

claim and at least $2,000 in earnings the second quarter. Under the proposal, a second bonus is

not paid if reemployment services are purchased after a first bonus payment. Table E.2 shows

that for the baseline simulation, 26.7 percent of the sample could be paid both

bonuses—provided funds remained in the PRA after purchase of services—while a total of 40.2

percent of those potentially offered a bonus appear to qualify for a first bonus payment. Since

they did not gain employment during the first 13 weeks, 58.8 percent of the sample would not

qualify for either bonus but could use PRA funds for services or income support payments after

benefit exhaustion. 
vii

If every UI claimant offered a PRA accepted, and every recipient spent the entire $3,000

grant, then 28,440 offers could be made over two years with the Georgia budget of $85.32 

million. However, it is unlikely that all account recipients will spend their entire grant. 

Table E.3 summarizes the average cost per offer given the prices and usage pattern for services

observed in Georgia. Since there is uncertainty about what elements of PRAs may emerge from

current deliberations or future proposals, the table presents results for three combinations: 1)

bonus, purchase of services, and exhaustee payments, 2) bonus and purchase of services, and 3)

bonus only with free services. 

The Average Cost of PRA Offers

The top row of Table E.3 reports that offers with all three elements would cost an average

of $2,475 in the absence of any behavioral response. If durations for those offered PRAs are 1

week shorter, the average cost per offer rises by $40, if the response is 2 weeks the cost rises by

$76 per offer from the baseline. The increased cost results from more beneficiaries becoming

employed soon enough to qualify for bonus payments. The average cost increases resulting from

responses to the PRA offer are modest.

If the extended jobless benefits feature of PRAs is eliminated, the average baseline cost

of a $3,000 account drops more than $1,000 to $1,452. Accounting for 1- and 2-week behavioral

responses increases the average cost by $39 and $76, respectively. 

The bottom row of Table E.3 shows costs associated with simplified PRAs involving

only a targeted reemployment bonus. Simulations for Georgia indicate the baseline $3,000

bonus offer would cost $1,040 in payments, and if insured durations declined by 1 or 2 weeks the

costs would rise by $46 and $91, respectively. Previous analysis of targeted reemployment
viii

bonuses suggested that cash offers as large as $3,000 would not be cost effective, but smaller

offers could be cost effective while still encouraging quicker return to work (O’Leary, Decker

and Wandner forthcoming).

The Number of PRA Offers Possible

Table E.4 translates the PRA average cost figures into estimates of the number of offers

that could be made assuming 100 percent acceptance of PRA offers. An 80 percent acceptance

rate was observed in the Illinois bonus experiment, which required a formal acceptance of the

offer (Woodbury and Spiegelman 1987). Assuming that acceptance is not correlated with factors

systematically influencing the rate of spending from PRAs, enrollment estimates could be

adjusted by a factor equal to the reciprocal of the take-up rate. Our simulations indicate that the

baseline PRA with all three elements could be offered to 34,473 Georgia UI claimants over two

years. That is about 17, 000 per year, or about 6.3 percent of Georgia UI claimants based on

2001 data. The PRA proposal targets WPRS profiled claimants most likely to exhaust benefits

who are initially eligible for at least 20 weeks of benefits, and 17,000 offers constitute about 13

percent of this target group in Georgia. Even with a 1- or 2-week behavioral response, the

Georgia budget would permit nearly 17,000 offers per year. 

If the PRA included only the bonus and purchase of services, not the extended benefits

feature, more than 31,000 offers per year could be made with the Georgia budget regardless of

the behavioral response. For offers that were simply $3,000 targeted bonuses, more than 43,000

offers per year could be made with the PRA grant to Georgia. 
ix

Additional Program Design Considerations

Our simulation results are very robust relative to the assumed service prices. Cutting

service prices in half would increase the number of offers possible by only about 20 percent. 

However, there is uncertainty about how charging for services would affect the pattern of

services chosen. 

Under what conditions would a PRA recipient either purchase services or take their

chances and pursue bonus payments? To investigate this question, we identified the

reemployment outcomes that would make a participant financially indifferent toward the

following two extremes: 1) purchasing no services with the hope of receiving the full PRA

amount in bonus payments, or 2) spending the entire PRA amount to purchase services with the

hope of speeding up reemployment or receiving a higher reemployment wage. To spend the

entire budget on services, the UI beneficiary must expect either earnings to be nearly 14 percent

higher or that employment will occur at least 6 weeks sooner. Research on employment and

earnings effects of employment services and job training suggest effects are more modest (Leigh

1995). PRA recipients might therefore reduce use of services in hopes of receiving larger

reemployment bonuses. 

We also checked to see if $3,000 would be sufficient to purchase the bundles of services

chosen given the assumed prices. If no PRA money was spent on bonuses and all on services,

about one-half of 1 percent of the UI claimants in our Georgia sample would have a budget

shortfall. Among these claimants the mean budget shortfall was $551 in the first 13 weeks and

$637 during the remainder of the UI benefit year. 
x

The PRA proposal requires that the amount of the PRA be uniform throughout the state

and not exceed $3,000. Since the UI reemployment experiments set bonus offers as multiples of

the WBA we simulated setting PRAs as 10 times the WBA, with a minimum of $1,500. The

maximum WBA in Georgia is $300. This design would permit about 15 percent more bonus

offers, and it also may moderate the incentive for some claimants to accept low-paying jobs

simply to qualify for the first bonus paid upon reemployment. 

The UI reemployment experiments paid bonuses only after at least 16 weeks of

continuous reemployment. In these experiments, the reemployment earnings of those offered

bonuses were at least as high as the control groups. The timing of bonus payments under the

proposed PRAs might yield a different impact on wages. 

The proposed formula for PRA budget allocations to states and local service delivery

regions within states is determined by the estimated share of unemployment. This formula will

yield a disproportionate share of PRA dollars to qualified UI claimants in states with relatively

exclusionary UI eligibility conditions. The total unemployment rate exceeds the insured

unemployment rate by a greater margin in such areas. Since PRAs are only offered to UI

claimants, the allocation could more equitably be based on the state and local share of insured

unemployment. Changing the allocation rule to be based on insured unemployment would not

penalize states that have higher rates. 

Summary

Economists have long touted the merits of incentives, pricing, and targeting in social

programs, particularly reemployment programs. These features have been tried in demonstration

programs and some are now used in Individual Training Accounts and the WPRS system. 
xi

However, all three features previously have not been combined in the same program. 

Simulations suggest that successful implementation of such a program requires an understanding

of the possible responses by participants. Simulations also point to the range of behavioral

responses necessary for PRAs to funtion well. While findings from past studies indicate that

measured responses to reemployment bonuses and expected wage gains from services fall short

of what is necessary for participants to choose services over the bonus, final assessment of PRAs

awaits implementation or demonstration of the program.

Table E.1 Estimated Services Usage Rates and Prices for Intensive, Supportive and Training

Services among WPRS Profiled UI Claimants in Georgia, Program Year 2001

Services Up to 13 weeks

(%)

After 13 weeks

(%)

Hypothetical prices

($)

Intensive services

Service coordination 0.5 0.2 356

Customer service plan 18.9 4.6 356

In -Depth Assessment 0.1 0.0 712

Counseling 20.3 5.1 712

Expanded workshop 0.4 0.3 712

Supportive services 1.7 0.6 1,068

Training services 2.7 1.8 1,424
xii

Table E.2 Sample Percentages by Employment Status in PRA Time Periods among

Recipients Profiled to be Most Likely to Exhaust UI Benefits

Employed in 

first 13 weeks

Employed after 13 weeks

Yes No

Yes 26.7 13.5

No 9.9 49.9

Table E.3 Average Cost per PRA Offer for Alternative Combinations of Features ($)

PRA scenario Baseline 1-week impact 2-week impact

Bonus, purchase services, and

 UI exhaustee payments 2,475 2,515 2,551

Bonus and purchase services 1,452 1,491 1,528

Bonus only with free services 1,040 1,086 1,131

Table E.4 Number of PRA Offers Possible in Georgia over Two Years for Alternative

Combinations of Features Assuming All Offers Are Accepted

PRA scenario Baseline 1-week impact 2-week impact

Bonus, purchase services, and

 UI exhaustee payments 34,473 33,924 33,446

Bonus and purchase services 65,149 63,538 62,111

Bonus only with free services 93,403 89,473 85,929
1

http://thomas.loc.gov/cgi-bin/query/z?c108:h.r.444:

1

Personal Reemployment Accounts:

Simulations for Planning Implementation

1. Introduction

In January 2003, Congress introduced draft legislation for the Back to Work Incentive

Act of 2003 that proposed a new way to help dislocated workers become reemployed.1

 Under

this approach, each eligible unemployment insurance (UI) claimant would be offered a personal

reemployment account (PRA) of up to $3,000. Funds in the PRA could be used to for three

things: 1) to purchase reemployment services, 2) as a reemployment bonus, and 3) as continued

income support after exhaustion of the regular UI entitlement. PRA offers were to be targeted to

claimants most likely to exhaust UI by state Worker Profiling and Reemployment Services

(WPRS) models. 

The draft legislation proposed a budget of $3.6 billion, with the money to be committed

over a two-year period and all disbursements from PRAs completed within three years from the

start date. Funds were to be allocated among states according to each state’s share of national

unemployment. By this rule the Georgia budget allocation would be $85.3 million. The

proposal also requires within state allocations to be based on the same criterion. Since PRA

offers must be targeted using WPRS profiling scores, this raises particular challenges for states

planning for implementation. 

The Back to Work Incentive Act did not become law, but the provisions for PRAs were

added to the proposal for reauthorization of the Workforce Investment Act (WIA). “Due to

uncertainty relating to the outcome of House-Senate negotiations on the FY 2004 Budget
2

<http://edworkforce.house.gov/press/press108/03mar/wiapc032703.htm> Accessed October 12, 2003. 

3

<http://www.whitehouse.gov/news/releases/2003/06/20030617-3.html> Accessed October 12, 2003. 

2

Resolution,”in March 2003 PRAs were removed from WIA reauthorization legislation know as

the Workforce Reinvestment and Adult Education Act of 2003.2

 Nonetheless, the administration

continues to advocate the creation of PRAs.3 So states must be prepared to act quickly. 

Effective implementation of PRAs requires advance planning, monitoring of the use of

funds by early PRA enrollees, and adjustment of state PRA plans during the course of

enrollment. Critical participant response parameters include rates of PRA offer acceptance,

intensive and training service use rates, the rate of qualification for first bonus payments, and the

rate of qualification for second bonus payment. Cost data for intensive and training services are

also required for planning and implementation of PRAs. 

This paper examines issues relating to PRA implementation based on simulations

performed using administrative data provided by the state of Georgia. The W.E. Upjohn

Institute for Employment Research investigated these questions under a grant from the U.S.

Department of Labor. The data from Georgia constitute a rare sample linking UI claims and

employment services records. To be forward looking, our simulations used the new WPRS

model now being implemented in Georgia. 

The next section provides an overview of how PRAs would work as proposed by HR 444

in January, 2003. Section 3 lays the foundation for simulation analysis of PRAs by examining

the pattern of service use in our sample for analysis. Section 4 estimates prices for intensive,

supportive, and training services as a basis for simulation. Section 5 gives a conceptual

framework for PRA simulations by providing a theoretical model of choice under PRAs. 
3

Section 6 partitions the PRA eligible UI claimants into groups based on their pattern of UI

benefit receipt and service usage. Section 7 presents state-wide PRA simulation results. 

Section 8 presents a stark example of the choice between buying services and receiving bonus

payments under the PRA. Section 9 examines sub-state budget allocation alternatives. The final

section presents a summary and suggests some extensions for the simulation analysis. 

2. PRAs under HR 444

The proposed PRA combines several innovative features. Each has been tried separately

before, but no previous program or demonstration project has brought them all together in quite

the same way. The first novel component of the PRA is the requirement that participants directly

pay for intensive and training services. Employment services provided by one-stop career

centers under the Workforce Investment Act (WIA) are divided into three levels: core, intensive,

and training. Services within each level are characterized by the amount of staff involvement

and the extent to which customers can access the service independently. Core services typically

have the broadest access and the least staff involvement of the three categories. Many core

services are accessible on a self-serve basis. 

Intensive services require a greater level of staff involvement and, consequently, access is

more limited than for core services. Services within the intensive category include individual

and group counseling, case management, aptitude and skill proficiency testing, job finding

clubs, creation of a job search plan, and career planning. Training services, the third and highest

level of service intensity, are usually available to customers only through referrals. 

Core services are free for everyone, intensive and training services are free to the general

public, but PRA recipients would be required to pay for such services. Service providers would
4

determine the fees to charge. PRA recipients would choose whether or not to purchase such

services and whether to purchase the services from public or private providers. Therefore,

service providers are faced with determining prices and with understanding how those prices

may affect the demand for their services. Some evidence about customer behavior in such an

environment is being provided by the individual training account evaluation (Decker and PerezJohnson forthcoming). 

The second component is the bonus payment. Under the PRA, UI claimants would be

given lump sum payments from their accounts if they return to work within a specified time

period. The purpose of the bonus is to provide an incentive for dislocated workers to return to

work as quickly as possible. A bonus incentive system has been incorporated in several

demonstration projects sponsored by the U.S. Department of Labor, but it has never been put in

practice on a state-wide or program-wide basis. Based upon evaluations of these demonstration

projects, we expect that a bonus, if of sufficient size relative to a claimant’s weekly benefit

amount, will shorten the average duration of UI compensated unemployment by as much as a

week (Robins and Spiegelman 2002).

PRA account recipients who become reemployed within 13 weeks of their UI claim date

would be paid 60 percent of their PRA account balance upon reemployment. The remaining 40

percent would be paid six months later if employment is maintained and no additional services

are purchased. 

The third possible use of PRA funds permits UI benefit year recipients who exhaust their 

regular benefit entitlement to draw funds from their PRA at the rate of their weekly benefit

amount (WBA). This PRA feature would act like an extended UI benefits program, and like the
5

availability of those programs does it introduces the risk of prolonging unemployment durations

(Woodbury and Rubin 1997). 

The PRA proposal requires that offers be targeted to UI claimants who are most likely to

exhaust their regular UI benefits, and that WPRS models be used to target offers (O’Leary,

Decker and Wandner forthcoming). The WPRS system evaluates the exhaustion likelihood of

UI claimants who are neither union hiring hall members, nor on employer standby awaiting

recall to their previous job on a definite date. Such claimants are not expected to conduct an

independent job search while receiving benefits. PRAs would be offered to claimants with a

high profiling score, and who are eligible for at least 20 weeks of UI benefits. Given that offers

are to be targeted using WPRS scores to those most likely to exhaust their benefit entitlement,

nearly all offers would be made to UI claimants in the top 30 percent of the state WPRS

distribution of claimant scores. Consequently, we focus our simulation analysis on that group of

claimants. 

3. The Sample and Services Chosen

The data used to simulate implementation of PRAs in Georgia were originally provided

for work on the Frontline Decision Support System (FDSS) (Eberts and O’Leary 2002). The

data record participation in intensive, supportive and training services provided by Georgia

Career Centers. Claimant information includes UI benefit entitlement, weekly benefit amount

(WBA), total benefit payments, limited demographic information, and quarterly UI wage

records. The wage record data provides a way to examine the employment history of each UI

beneficiary.
4

Our count of training service participants is the sum of referrals to training and formal WIA training

registrations, correcting for any double counting. The widespread use of Hope grants and scholarships in Georgia

funded by the state lottery probably results in lower observed training participation rates for Georgia than is typical

in other states. However, Georgia has significant levels of training and the Hope money permits WIA funds to be

used more aggressively for supportive and intensive services. 

6

Complete benefit year data were drawn on all observations entering the system for UI

claims during the period January 1, 1996 through September 30, 2001. As summarized in

Table 1, these data included 851,054 observations. To focus on UI claims activity and service

use since the start of WIA implementation and one-stop career center operations, we restricted

our UI claim inflow period to the five quarters available after July 1, 2000. This yielded a

sample size of 318,837. 

Since PRA offers are to be made to claimants near the top end of the distribution of

WPRS profiling scores, we restricted our analysis to the 232,617 claimants assigned a profiling

score in Georgia during our inflow period. This implicitly excludes those with a definite recall

date and members of union hiring halls; members of these groups are not expected to conduct an

independent job search to maintain UI benefit eligibility. An additional PRA eligibility

condition is that claimants must be initially eligible for at least 20 weeks of benefits. Imposing

this condition reduces the sample size to 156,220. A handful of other observations were

excluded to assure complete data on all variables needed for analysis. A sample of 156,181

observations was used in this analysis.

For our analysis sample of 156,181 the pattern of service use is summarized in Table 2

which shows the use of intensive, supportive and training services which would be paid for out

of the PRA.4

 The number of participants and the participation rate are split into two time

periods: the first 13 weeks of claims, and the weeks in the benefit year remaining after 13 weeks. 
5

Claimants referred to WPRS reemployment services can be excused if they have a definite date to report to

work. They may also be excused because of illness, injury, or to care for dependent children, however in these cases

UI benefit entitlement is suspended because of failure to satisfy the “able and available” continuing UI eligibility

requirements. 

7

The most popular services in both periods are Customer Service Plan and Counseling, with 18.86

percent and 20.31 percent of profiled claimants using these services in the first period and 4.6

and 5.1 percent, respectively in the second period. 

Table 3 expands on Table 2 by adding additional rows at the bottom showing the use of

core services which are free to all customers regardless of whether or not they are granted a

PRA. Among the core services, in the first 13 weeks Specific Labor Market Information (LMI)

is the most popular with 72.54 percent using this service. Other popular core services for this

group are Job Order Search (54.18%) and Service Needs Evaluation (41.61%). Near the bottom

of Table 3, the service with variable name C20 described as REU/Profiled had 30.21 percent of

profiled claimants participating in the first 13 weeks. This is the WPRS referral indicator

showing a claimant was sent to the re-employment unit (REU) for profiling reemployment

services. Of those referred to WPRS, about 25 percent were excused after reporting.5

 Georgia

has a state-based program similar to WPRS, called the Claimant Assistance Program (CAP). 

CAP is the Georgia UI eligibility review program (ERP) which requires periodic visits to a

Georgia Career Center for services by those who continuously remain on a UI benefit claim. 

More than 37 percent of claimants in our analysis sample were referred to the REU because of

selection through either WPRS, CAP or both programs. 

Table 4 presents service use data in the first 13 weeks and remainder of the benefit year

for the top 30 percent of the WPRS distribution. This is the strata of claimants most likely to be

offered a PRA. Use of the intensive services Customer Service Plan and Counseling are higher
8

for this targeted group, with 31.7 and 33.3 percent of profiled claimants using these services in

the first period and 7.8 and 8.4 percent, respectively in the second period. The core services

information shows that 69.84 percent of these claimants near the top of the predicted exhaustion

distribution were sent to the REU. Referral to services by the WPRS mechanism probably

explains the higher use rate of intensive services. It is this targeted sample on which we

conducted simulation analysis of PRAs.

4. Prices for Services

Under the proposed PRA legislation, states must charge those UI beneficiaries who

accept a PRA offer for receiving intensive, supportive, and training services. States must also

deduct the cost of services used from the individual’s PRA balance before any cash bonus is

determined. Therefore states must set prices for services. Information on service costs, which

could be used as a basis for service prices, is not readily available. The only commonly

published WIA service cost data are total expenditures by state. These state reports are part of

the WIA performance measurement system, and they include data on the number of WIA

participants in the program year. Average costs per participant can therefore be computed for

services overall. However, the average cost of the separate categories of intensive, supportive,

and training services is not available. 

The simulations presented in this report are based on Georgia UI claimants entering the

system between July 1, 2000 and September 30, 2001. This is the first five quarters of WIA

program operation. We therefore use WIA cost data for the 2001 program year (PY) as the basic

data for service cost prices. In that year, WIA program expenditures in Georgia were $56.4
6

<http://www.doleta.gov/usworkforce/performance/State_1-Page_AR_Summaries/georgia.xls> <Accessed

September 25, 2003.>

7

Many of the core and intensive services provided to UI claimants are financed by Wagner-Peyser grants to

the state Employment Service. Our approach is simply to use the shares of participants in intensive, supportive and

training services to decompose the WIA grant. 

8

Based on advice from Georgia Department of Labor field Career Center staff, we count participation in a

service only once during the first 13 weeks of a claim even if the data indicate multiple occurrences of the same code

in the time period. The same rule is applied for counting service participation after the first 13 weeks. 

9

million, and average per participant costs were $3,140.6 These participants included adults,

youth, and dislocated workers enrolled in WIA programs delivering training, intensive and core

services.

To perform PRA simulations we need estimates of average costs for separate intensive,

supportive, and training services. We therefore decompose the WIA grant by the proportions of

customers using each type of service state wide in our sample of UI claimants.7 Our 

computations are based only on claimants who would be eligible for a PRA under the rules of the

original HR 444 proposal. That is, those with a profiling score (meaning they were neither union

hiring hall members, nor waiting employer recall), and having 20 or more weeks of UI

entitlement. Additionally we required that complete UI wage records be available. 

The computations leading to our service prices are summarized in Table 5, which also

reports the use of intensive, supportive, and training services by the 156,181UI claimants in the

sample. Georgia provides five types of intensive services: service coordination, customer

service plan, in-depth assessment, counseling, and expanded workshop; plus supportive services. 

A total of 89,257 services were recorded for the claimants examined.8

 The most popular

intensive services are customer service plan and counseling with observed participation rates

during the first 13 weeks of claim being of 18.9 and 20.3 percent respectively. A total of 7,024
10

training services were received in the UI benefit year by claimants in our sample. For both

intensive and training services, the bulk of service inflows takes place during the first 13 weeks

of the UI claim, while for supportive services the majority is provided after 13 weeks into the

claim. 

In the absence of hard data on service costs, based on informal discussions with one-stop

center staff in Georgia, we impose relative prices on the intensive and supportive services. Two

intensive services—service coordination and customer service plan—are assumed to have the

lowest cost, and they are assigned a single unit value, a type of numéraire for employment

services. Twice the unit value is assigned to the other three intensive services: in-depth

assessment, counseling, and expanded workshop. Supportive services per recipient are assumed

to cost three times the unit value. Finally training services are priced at four times the unit value.

To arrive at our cost estimates, we split the total WIA budget among services based on

the number of participants and the relative value in comparison to the numéraire. There were

37,648 services with a unit value, 40,962 with twice the unit value, 3,623 with three times the

unit value, and 7,024 with four times the unit value. The resulting unit price for lower cost

intensive services is therefore $356 per participant, the higher cost intensive services average

twice that or $712 per participant. By this approach supportive services are estimated to cost

$1,068 on average per participant. The remaining budget is evenly divided among the 7,024

training participants to arrive at an average cost of $1,424 per participant. These average service

cost prices are consistent with the average service cost per participant of $3,140, since many

service participants use more than one service. 
11

5. A Choice Model for PRA Simulations

To design PRA simulations that are relevant for state administrators, it is useful to frame

the context of claimant choice by a decision model incorporating the variables governing choices

resulting in withdrawals from PRAs—employment and services use. We consider a simple twoperiod model. The first period includes the first 13 weeks of a claimant’s benefit year. We

proxy this by the first 13 UI payments to a PRA participant. This period is the time frame within

which a PRA participant must find a job to qualify for a reemployment bonus payment. During

this period, the participant can engage in one or more of several activities. He or she can look

for a job, find a job (and thus be eligible for the bonus), receive core services, and purchase

intensive, supportive, and training services. The second period is the time span a person must

remain employed (given that they found a job in the first period) in order to collect the second

part of the reemployment bonus. During this period, a PRA participant can receive core

services, purchase intensive, supportive, and training services, continue with employment, find

new or alternate employment and exhaust benefits. 

The choice to purchase services or engage in the other activities depends upon the

expected returns from those decisions. Therefore, we need to delineate the costs and benefits of

each decision. Costs include the out-of-pocket costs of purchasing intensive or supportive

services (cs) and training services (cT) as well as the opportunity cost of spending time receiving

services and engaging in search efforts (cz). Benefits include the earnings received from

working (w), the bonus payments (b), and the UI benefits received (x). The future expected net

benefits depend upon the choice of services and the probability of finding employment. 
12

Therefore, a person in period one who accepts a PRA offer faces several combinations of

costs and benefits. For simplicity, we assume that the benefits from actions in a period accrue in

the same period. For example, if a person is employed in the first period the wages and the

bonus are received during that period. Similarly, the costs accrue in the period in which the

actions take place. Note that the wage may differ depending upon whether or not a person

receives training. In addition to increasing the likelihood of receiving a job offer, training may

increase the reemployment wage and increase the retention rate.

 From Figure 1, it is clear that a person’s decision to purchase services is complex and is

based on their own choices and the ability to find a job, which depends in part on the local

economic conditions. For example, the benefits accrued in the first period for those employed

and choose to purchase services depend upon several decisions. Since the bonus depends upon

the amount of the account left over after purchasing services (b1 – cs – cT), the first decision is

how much of their PRA account will they use to purchase intensive and training services? This

decision, in turn, depends upon the participant’s perception of how much these services will

increase his or her probability of finding and retaining a job. The probability of finding a job

and the time it takes to become reemployed and start to receive earnings will determine the

amount of benefits (wages, bonus, and UI benefits) the participants will receive that first period. 

Changing the cost of services and the perception of the effectiveness of services may change the

choices that PRA participants make. 

6. PRA Participant Groups

UI claimants who accept a PRA will be faced with decisions to purchase services based

on the prices set and their employment prospects. Since we are not able to simulate what
13

services would be bought if customers were charged for them, we examine the pattern of service

use observed under the current WIA program, and assume as a first approximation that it would

not change. In addition, we delineate the service usage by different employment outcomes. This

pattern mimics, to the extent possible, the choices of services that UI claimants might make

under different employment situations. In reality, the patterns observed in the data are the result

of both choices by UI claimants and the referrals to services by program staff. 

Two time periods are relevant for decisions about spending on services from a PRA. The

first time period is based on the length of time within which an eligible UI claimant must find

employment in order to qualify for the first part of the cash bonus. Consequently, period one is

the first 13 weeks after a claim. The second period is based on the length of time the UI claimant

must maintain a job in order to qualify for the second bonus payment—26 weeks. In each of

these two periods a claimant may either be employed or not, and may either use services or not. 

Figure 2 summarizes the four alternative possible employment states, and Figure 3 shows the 16

possible employment and service use states in the two time periods.

The rows Figure 2 represent the employment status in period one and the columns show

the status in period two. We denote employment status (E) by a 1 for employment and 0 for nonemployment. Accounting for employment status in the two periods, we use the first numeral to

indicate employment status in period one and the second numeral to indicate employment status

in period two. For example, E10 represents the group of UI claimants employed in the first 13

weeks, but not employed after 13 weeks. The numbers in parentheses are the proportion of

sample in each employment group. The first number is the share in the full sample, and the

second number is the share in the top 30 percent of the WPRS distribution. Introducing a PRA
9

Only a small fraction of UI claimants actually have more than one spell of joblessness in a benefit year. 

14

would be most likely to move UI claimants from either E10 or E01 to E11. There could also be

movement from the largest cell, E00 to either E10 or perhaps E11. Our simulations inducing

quicker return to work investigate the cost impacts of such movements. 

To create the employed and not-employed groups in the two periods, we set clear

definitions for these concepts based on available administrative data. Our definitions are set to

approximate qualification for the first and second bonus payments from a PRA. A claimant is

classified as employed in the first period if full-time equivalent weeks of UI benefits drawn is

less than or equal to 13.9

 That is if total UI compensation paid in the benefit year divided by the

weekly benefit amount (WBA) is less than or equal to 13. We adopted this definition since

week-by-week UI compensation data were not available to us. 

The definition of employment in the second period is based on quarterly wage records. 

For the second bonus to be paid, a claimant must remain employed at least six months. We

examine the three quarters of wage records following the quarter in which the benefit year begin

(BYB) date occurred. A client is considered employed in the second period if any wages are

present in the first and third quarters following the quarter in which the BYB occurs and if wages

total $2,000 or more in the second quarter following the BYB. Since a quarter is 13 weeks long,

there must be some employment in the first full quarter after the quarter of filing for UI benefits

if there is reemployment within 13 weeks and it is maintained for six months. However, it is not

necessary to require employment for that full quarter, so we require only $1 in earnings to appear

in the wage record for that quarter. We require at least $2,000 in earnings during the second

quarter since this approximates the minimum wage for 13 weeks at 30 hours per week. Finally,
15

six months continuous employment may be achieved without being employed throughout the

third quarter after claiming benefits, so we require only $1 in earnings during that quarter. 

In our simulations, the first bonus will be paid if there is employment in period one by

the above definition, provided a PRA has not been exhausted by spending on employment

services. However, a second bonus will be paid only if there is employment in both periods. 

That is, provided money remains in the PRA, a second bonus payment results for those in group

E11, but not for those in group E01. 

Figure 3 provides a representation of the possibilities for service use in the two time

periods of the benefit year. Using notation like that for employment, S11 denotes the group

purchasing services in both time periods. S10 represents the group of claimants who purchase

services in the first period, but not in the second period. When simulating expenditures from

PRAs, it is important to note that receipt of services in the second period disqualifies a claimant

from being paid a second bonus. 

For each of the four employment groups, E11, E10, E01, and E00, there are four possible

service purchases groups. Figure 3 adds the service purchase groups to the employment outcome

groups to yield the 16 employment and service groups that are the basis of our simulations. 

Table 6 presents information about the relative size of each of these 16 groups of profiled UI

claimants. The table also provides mean values for each group on important UI program and

demographic characteristics. Among the employment groups, about one third are employed in

both periods by our definitions, another third are not employed in either period, and the

remaining third are employed in one but not both time periods. 
16

For each of the four major employment groups, Table 6 orders the service receipt groups

by the likelihood of bonus payment. That is, bonuses would more likely be paid to those in

groups S00 and S10, while those in groups S01 and S11 could be paid a first bonus but not a

second bonus. Within each of the four major employment groups, the largest service group is

S00—no services used in either period. 

In terms of average full time equivalent (FTE) weeks of UI benefits paid in the benefit

year, the shortest mean durations are for the employment groups with employment in the first

period. Groups E11 and E10 have mean durations of 3.8 and 2.5 weeks respectively. The mean

durations of UI receipt for E01 and E00 are 19.3 and 22.9 weeks respectively. 

The entitled duration of UI benefits and the mean weekly benefit amount (WBA) are

similar across the employment groups. This is true both for the actual WBA data and assuming

the new 2003 maximum WBA in Georgia of $300 per week. 

Workers under age 25 constitute 8.8 percent of our analysis sample. The most common

reemployment pattern for these younger workers was to gain reemployment in period one, but

not to hold it in period two. For those in the 25 to 45 age group, the most common pattern was

employment in both periods. Among workers over age 45, the most common pattern was to be

out of work in both periods. The greatest latitude for reemployment response to PRAs may be

among younger and older workers. 

To group claimants by income, we examined quarterly earnings reported in wage records

during the first four of the five quarters preceding the benefit claim, which is known as the “base

period” for UI. From these quarterly wages we selected the highest value as a proxy for earnings

in a quarter of full working hours. We then ranked these and identified claimants in the bottom
17

quarter of the distribution as the low income group. The largest share of low income claimants

were those who found employment in the first period but not in the second. This may have

resulted partly from our definition of second period employment that requires at least $2,000

earnings in the second quarter after claim. However, those not employed in either period had a

dramatically lower share in the low income group. 

Table 7 presents a summary of characteristics for the 16 employment and service groups

in the top 30 percent of the WPRS distribution. As expected for this targeted group, in the

absence of a behavioral response, smaller proportions of the sample would qualify for either a

first or second bonus. The average duration of entitled weeks of UI is distributed like the whole

sample, but the average number of UI weeks of compensation is uniformly higher. Mean weekly

benefit amounts are somewhat higher and the sample includes a significantly higher proportion

of older workers. The age and earnings results are consistent with the aims of WPRS targeting

which aims to serve dislocated workers. 

7. State-Wide Simulation Results

The simulations involve applying the prices for services to the patterns of service use by

individuals in the 16 employment/service groups defined in the Georgia sample. Since the

simulations are based on individual claimant observations, we simply apply the proposed PRA

rules to each observation in the data. This approach is preferred to one relying on subgroup

averages that could generate misleading results because of imposing PRA rules at an aggregate

rather than individual level. For example, the mean services expenditure for a particular

employment/services group could indicate that mean PRA budgets are exhausted before either

the second bonus payments can be made or services are purchased in period two. However, for
18

some individuals who used fewer services than average for the group in period one, there may be

sufficient funds for services or a bonus in period two. 

Even with our rich Georgia data set, we cannot observe the likely response to several

features of the proposed PRAs. For example, 1) the proportion of claimants who will accept a

PRA offer, 2) the effect of charging for services on choices about participating in services, and

3) the effect of PRA offers on the duration of benefit receipt? We choose simple answers to each

of these questions. If a state were actually to implement PRAs, these parameters would be

monitored and the simulations updated for purposes of managing enrollment rates. Our

approach is to compute baseline PRA enrollment estimates assuming no behavioral response to

any of the incentives introduced by PRAs. We then examine the effect of relaxing these

assumptions

Regarding the acceptance rate of PRA offers, only the Illinois reemployment bonus

experiment had a similar requirement. In that instance, 80 percent of those offered the chance of

qualifying for a bonus payment agreed to participate in the demonstration (Woodbury and

Spiegelman 1986). There were no particular claimant characteristics correlated with the decision

to participate. Our assumption for the simulations is that everyone offered a PRA accepts. This

assumption could be easily adjusted by re-scaling our simulated enrollment rates by the

reciprocal of the observed participation acceptance rate. 

If the imposition of prices reduces the use of services, then our simulation will

overestimate service use and perhaps underestimate the bonuses paid. Our simulations assume

that the services chosen in the absence of directly charging for them are the same services that

would be chosen if UI claimants were required to pay out of PRAs for intensive, supportive and
19

training services. Without observing choice in an environment where services must be paid for

by participants, it is impossible to make a reasonable alternative assumption. At the extreme, it

is possible that given the choice between a PRA and free services, claimants would accept a

PRA and the chance of a cash bonus only if they had no intention of using the PRA to buy

services. To include this possibility we include simulations where there is no payment for

services. 

The simulation methodology is summarized in Table 8 for a PRA involving all three

components: 1) a reemployment bonus, 2) purchase of services, and 3) extended income

maintenance payments. Given the 16 employment/services categories defined for the two PRA

decision periods in the benefit year, we set baseline simulations for targeted PRAs by calculating

the mean cost of services used and bonuses paid for claimants in each group. These

computations assume that PRAs were provided to the top 30 percent of the WPRS profiling

distribution of Georgia UI claimants assigned a profiling score and initially eligible for at least

20 weeks of UI benefits. This simulation also assumes that every PRA offered is $3,000. The

mean spending for each of the 16 employment/service groups is the simple row sum of the

bonus, costs, spending for services, and extended compensation for the two periods listed in

Table 8. The simulations amount to multiplying the mean group spending by the group

proportion in the full sample to yield the expected budget impact listed in the far right column of

the table for each group listed by row. The mean cost per offer is the sum of these expected

budget impacts for the 16 groups or $2,475. This result suggests that the actual budgetary cost

of making a $3,000 PRA offer more than $500 less than that amount. 
20

The proposed legislation would provide $3.6 billion to fund PRA offers in states for two

years. The budget is to be allocated among the states in proportion to their share of the nation’s

measured unemployment. Based on calendar year 2002 figures, 2.37 percent of the nation’s

unemployed were in Georgia, meaning the state’s share of the PRA budget would be $85.32

million (Lawrence 2003). If every claimant who was offered a $3,000 PRA spent their full grant

then 28,440 offers could be made. However, under the assumptions of the simulation presented

in Table 8, offers could be made to 34,473 claimants. Changing the simulation assumptions will

change this result. 

 Table 9 summarizes a simulation wherein PRAs include bonus offers and spending on

services, but there is no provision for extended UI benefits. The expected cost per $3,000 PRA

offer targeted to the top 30 percent most likely to exhaust their UI entitlement is $1,452. This

expected cost figure suggests that 58,760 offers could be made with the planned budget grant to

Georgia. That would be more than 29,000 offers in each of two years, or 70 percent more offers

than the number possible when the extended compensation feature is part of PRAs. 

The simulation summarized in Table 10 presumes the only feature of the PRA is a

targeted reemployment bonus (O’Leary, Decker and Wandner Forthcoming). Effectively, this

simulation assumes that the prices for services are all zero and there is no extended

compensation. The expected cost per $3,000 targeted bonus offer is simulated as being $1,040,

so that 82,038 such offers could be made given the assumed budget for Georgia. 

A complete array of simulation results is presented in Table 11. Simulations were

computed on the targeted sample of the top 30 percent most likely to exhaust UI as identified by

the new Georgia WPRS profiling model, assuming the PRA offers were a uniform $3,000. For
21

the three PRA definitions examined in Tables 8, 9, and 10, simulation results are presented for

the baseline case of no behavioral response, and assuming that the PRA offer shortens insured

durations by one and two weeks. A one week response is at the very top end of all

reemployment bonus offer impacts estimated (Robins and Spiegelman 2002). We consider the

two week response to ensure that we span the entire range of possible responses to PRA offers. 

The 1- and 2-week behavioral responses are simulated by simply expanding the period one

reemployment definition from 13 weeks to 14 and 15 weeks respectively. For these simulations,

counts of services purchased are also adjusted to the alternate time frames. 

For the full feature PRA with all three elements, a one week impact raises the average

cost by $40 per offer and a two week impact raises the average cost by $76. These changes

translate into relatively modest reductions in the number of offers possible. This result obtains

because the bonus payment costs are only a fraction of PRA spending which also includes

buying services and drawing extended compensation. The one and two week response has the

same affect on costs and enrollment for the two feature PRA with a bonus and purchase of

services. For the bonus only offer, the one week impact raises the average cost by $46 and the

two week impact by $91. Since these bonus only changes are relative to a smaller average cost

per offer than the two or three feature PRA, the proportionate reduction in offers possible is

greater. Nonetheless, even allowing for a sizable behavioral response, the bonus only offer

could be made to a significantly larger group given the available budget. 

8. Choosing the Bonus or Services

Imputing effects of positive prices on the bundles of services chosen is a difficult task. 

However, we offer an example that clearly exposes the alternatives available. Our example
22

answers the simple question: what reemployment outcomes would make a participant indifferent

between either of the two extremes: 1) purchasing no services with the hope of receiving the full

PRA amount in bonus payments, or 2) spending the entire PRA amount to purchase services

with the hope of speeding up reemployment or receiving a higher reemployment wage. The

elements of this decision are summarized in Table 12 by weekly incomes under alternative

choices. The example assumes the PRA value is $3,000, the WBA is $300, and weekly

reemployment earnings are earnings $800. The bottom row of Table 12 presents net present

values of the bonus only and services only alternatives assuming an annual discount rate of 3

percent. 

Choice between the alternative strategies is made at the time of the PRA offer. The

bonus only column in Table 12 assumes WBA receipt for 12 weeks, with a bonus of $1,800 paid

in week 13 together with $800 in earnings. Steady employment is then maintained for 6 months

and a $1,200 bonus and $800 in earnings accrues in week 39 yielding a net present value of

$27,825. 

A PRA recipient could rationally choose to spend the entire budget on services if either

earnings were expected to increase or reemployment were expected to occur sooner. Compared

to the no services strategy, the third column of Table 12 shows that weekly wages would have to

exceed $911 or nearly 14 percent higher than the assumed $800 reemployment wage, if the PRA

was spent on services and reemployment occurred in the 13th week. Such a large gain in

earnings is unlikely to result from reemployment services or short term job training (Leigh 1995,

pp. 88–91). 
23

If reemployment services resulted in no wage gain but did yield quicker reemployment,

the fourth column of Table 12 shows that the new job must begin by the seventh week after the

PRA is offered—or six weeks sooner—to make the PRA recipient as well off as if no services

were purchased and steady employment started in the 13th week and lasted six months. Evidence

on the effectiveness of employment services and job training suggests that both improve the

chances of reemployment, but neither speeds return to work by as much as six weeks. Job

training may actually prolong somewhat the time until return to work, while reemployment

services shorten unemployment durations of UI recipients by at most two weeks (O’Leary

forthcoming).

Reemployment services are cost effective because they are inexpensive to deliver, not

because they have large impacts. The structure of the proposed PRA, and the expected impacts

of services and training on earnings and reemployment suggest that claimants will tend to

conserve PRA funds in favor of reemployment bonus payments rather than spending on services

early in their UI benefit year. 

9. Sub-State Budget Allocation Alternatives

The proposed Back to Work Incentive Act of 2003 allocated $3.6 billion for PRA

enrollments over two years with funds distributed to states in proportion to their share of national

unemployment. Based on 2002 unemployment figures the Georgia share is 2.37 percent or

$85.32 million. The proposal also required allocation of PRA money within states by the same

rule. Table 13 summarizes how money would be distributed to WIA service delivery regions

(SDR) within Georgia based on this rule and an alternate rule with shares depending on counts of

UI claims. The latter rule would allocate PRA funding based on the extent to which unemployed
24

workers qualify for UI. Such a rule would be most appropriate for the national allocation to

states, since it would provide larger shares to states having UI eligibility rules accommodating

the regional unemployment situation. The current formula allocates PRA money to states based

on the level of unemployment regardless of whether state UI law adequately provides for the

jobless. 

Based on the allocation rule in proposed legislation, Georgia SDR 3 which includes

Atlanta would receive 37.9 percent of the state PRA budget while SDR 1 in Northern Georgia

would get 8.4 percent. Under the alternate rule where the allocation depends on the share of

valid initial UI claims, the SDR 3 share would fall to 34.4 percent while the SDR 1 share would

rise to 11.1 percent. As the far right column in Table 13 shows, changing the budget allocation

rule would decrease the dollar funding in SDR 3 by 9.2 percent, raise the dollar funding in SDR

1 by 30.8 percent. The change in funding formula would benefit Northern Georgia, leave

Coastal Georgia unchanged, and hurt Atlanta and the balance of the state. 

Since PRA offers are to be made based on WPRS model predicted probability of UI

benefit exhaustion, for any given budget allocation to an SDR the number of offers that can be

made depend on the employment probabilities in the two periods and the pattern of service use. 

Service use patterns vary across regions within the state both because of custom and because the

services best suited to local labor market conditions differ. To exhaust the SDR budget

allocation for PRAs, the SDRs will enroll differing proportions of the top of the WPRS profiling

score distribution. 

Based on the new Georgia WPRS model, Table 14 shows the average actual cost of

making a $3,000 PRA offer in each of the 12 Georgia SDRs for the full sample and for offers to
10In these simulations, totaling the spending figures across SDRs does not yield exactly $42.66 million, or

half of the expected Georgia grant of $85.32 million, because computations in each SDR are based on costs for

targeted groups set by rounding to whole percentile point groups of the profiling distribution. 

25

top groups in the WPRS score distribution. The PRA simulated includes a bonus and purchase

of services, but not extended compensation. Starting with the top 15 percent, costs for five

additional groups are examined by lowering the threshold to include 5 percentage points more of

the distribution in each group.10 

The distribution of SDR scores around the state of Georgia is not uniform. High

unemployment areas, such as central city Atlanta, tend to have more UI claimants at the top of

the state distribution of WPRS scores than low unemployment areas. Consequently, a high

unemployment area would most likely exhaust a PRA budget at a higher threshold of the state

WPRS distribution than an area with lower unemployment that would need to go deeper in the

distribution. The figures in Table 14 show the numbers of UI claimants in top groups of the state

WPRS distribution who could be offered a PRA in each SDR in a given year. Table 14 also

shows how far into the state wide profiling distribution each SDR has to go to exhaust their PRA

budget under the proposed and alternative budget allocation rules. Results are given for the

within state budget allocations based both on the distribution of unemployment and the

distribution of valid initial UI claims. We see that in the Atlanta area SDR 3 enrollment could be

made to claimants in the top 19 percent of the state-wide profiling distribution under the

proposed budget allocation and claimants in the top 17 percent under the alternative allocation. 

The similar target groups in SDR 1 are the top 31 and 41 percent respectively. This table makes

it clear that under the proposed funding mechanism, it is impossible to set a single threshold

score to be applied statewide in all SDRs. 
26

Table 15 repeats the exercise of Table 14, except that the percentages listed are not the

local SDR thresholds based on the state-wide distribution of WPRS scores, instead they are the

percentages of the top of the local distribution of WPRS scores. That is, instead of showing the

point in the state-wide distribution where local enrollment would stop, the numbers in Table 15

indicate the share of all profiled claimants in an SDR that could be offered a PRA. The table

indicates that, if all those offered a PRA accept, then between 20 and 30 percent of the top of the

profiling distribution in each SDR could be offered a PRA. 

In Table 15 the enrollment numbers by the unemployment method suggest that SDR 1

should enroll 2,504 per year into PRAs, or about 200 per month. If the PRA acceptance rate is

lower, the figures should be rescaled by the reciprocal of the acceptance rate. For example if 80

percent of offers are accepted, then PRAs should be offered to 125 percent of the target number. 

For SDR 1, instead of offering 2,500 PRAs, 3,000 offers would be made. 

10. Summary and Extensions

Congress proposed personal reemployment accounts in the Back to Work Incentive Act

of 2003. The legislation did not succeed, but features of the PRA may resurface in future

proposals. The recommended PRA would provide each eligible UI claimant with a special

account of up to $3,000 that can be used to purchase job training and intensive reemployment

and supportive services. Any funds remaining in the PRA could be paid as a cash bonus for

reemployment within 13 weeks. Claimants exhausting their regular UI entitlement could draw

extended compensation from remaining PRA funds at the rate of their WBA. The Back to Work

bill called for a budget of $3.6 billion for PRAs, with the money to be committed over a two year
27

period. The budget for PRAs was to be divided according to the state shares of total

unemployment. 

This paper provides a simulation analysis of questions relevant to implementation of

PRAs by states. The analysis is done using data for the state of Georgia. The simulations rely

on recent patterns of intensive, supportive and training services use. Simulations for alternative

rules setting the PRA amount and varying behavioral responses are examined. Like the

legislative proposal, simulated PRA offers are targeted using Worker Profiling and

Reemployment Services (WPRS) models.

Our baseline simulations presume that the pattern of using reemployment services

observed in one-stop centers under WIA would continue if PRAs were introduced. These

simulations start by asking the question, what would the average PRA offer of $3,000 actually

cost the system under the current pattern of service use and UI benefit receipt observed? The

key question examined is how many PRA offers could be made with a fixed budget? Under the

proposed legislation, the PRA grant to Georgia would be $85.32 million. If every PRA recipient

spent the entire $3,000 grant, then 28,440 offers could be made over two years, or 14,220 offers

per year. However, our simulations suggest that many more PRAs could be offered in Georgia

given this budget. 

If there is no behavioral response to the $3,000 PRA offered to the top 30 percent of

those most likely to exhaust UI, our simulation suggests that offers could be made to 34,473

claimants over two years, or 17,236 per year. This number is 20 percent more than the number

offered assuming all PRA recipients exhaust their budget. Even assuming that PRA offers

induced UI spells that were one or two weeks shorter than usual, the targeted simulations suggest
11The simulation reported in this document is based on information from the records of individuals 46,855

targeted individuals. Because of space constraints and confidentiality concerns, the spreadsheet is based on data

aggregated by subgroups. The results are qualitatively similar but not identical to the micro data based simulations. 

28

that at least 33,446 PRAs of $3,000 each could be made over two years in Georgia given the

projected budget. A prudent approach to PRA enrollment would be to enroll about 16,000 the

first year and monitor the rate of using the PRA budget and then to adjust enrollment in the

second year. 

Since PRAs involve paying for intensive, supportive and training services our

simulations made assumptions about the prices for these services. We set prices based on total

WIA expenditures in 2001 and observed service participation rates. There is uncertainty about

what the actual prices would be for services if PRAs were implemented, so we conducted price

sensitivity analysis of our simulation results. We found that doubling the price of services

reduced the number of offers possible by about 20 percent. Similarly, halving service prices

increased the number of offers possible by about 20 percent. That is, the cost of PRA offers is

relatively insensitive to changes in the price of services. Appendix A to this report presents

results from a spreadsheet that contains an aggregate version of a simulation cutting services

prices in half. State policy makers could use the Microsoft Excel version of the spreadsheet to

examine the effect of changing key parameters, such as the price of services, to observe how the

change would affect the various outcomes of the simulation.11 The simulations presented in

Appendix A assume the PRA provides for services purchases and bonus payments, but not

extended income maintenance payments.

Since the extended benefits feature is the most expensive part of PRA offers, we

conducted several simulations of PRAs involving only a reemployment bonus and purchase of
29

services. Assuming no behavioral response, the average cost per offer dropped to $1,452 and the

number of offers possible rose to 58,760. Even assuming a two week response to the offer,

nearly 28,000 offers per year are possible with this simplified PRA.

We further simplified the PRA offer and performed simulations under the extreme

assumption that service prices are zero. That is, “free services” simulations. This assumes

essentially that the PRA is a reemployment bonus offer, and that UI claimants may use intensive,

supportive, or training services as they choose. The PRA costs declined and possible

enrollments for Georgia increased to about 39,000 per year under our simulations. 

An important question in implementing PRAs, in which customers must pay for services

from their account that were previously provided at no charge, is whether or not the customers

could still get the same set of services they chose before? We found that under a PRA with only

a bonus and purchase of services, only about 1.0 percent of beneficiaries would have a shortfall

in purchasing their desired bundle of services. If there were no bonus payments, then only 0.5

percent of claimants could not afford their desired services. Taken together these results suggest

that $3,000 PRAs granted to the top 30 percent of the profiling distribution would be sufficient

to buy the preferred set of reemployment services for all but less than one percent of claimants. 

While we did not simulate how charging for services may change the choice of services

used, we did consider a simple example to reveal the choices involved. Given estimates of the

likely effect of reemployment services on the speed of reemployment and earnings for

reemployment, and the time horizon involved in PRA decisions, most PRA receipients will

probably conserve PRA funds by using fewer intensive, supportive and training services than if
30

they were free. Account recipients will instead seek speedy employment with the aim of cashing

out their PRA as a reemployment bonus. 

We also did simulations of an alternative definition of the PRA amount from a fixed cash

amount to a multiple of the WBA with a minimum set at $1,500. Such a rule is similar to the

design of reemployment bonus offers in the Pennsylvania and Washington field experiments. 

Under this design the average cost per PRA offer declined and the number of offers possible

increased. 

It is important to consider alternatives to the fixed $3,000 value of the PRA given other

design parameters. In particular the rule specifying that 60 percent of the remaining PRA

balance would be paid immediately if reemployment is achieved within the first 13 weeks of

claim raises concerns about the PRA effect on reemployment wage rates. All of the offers tested

in the four reemployment bonus experiments required at least 16 weeks of continuous

reemployment before a bonus was paid. In none of the experiments did bonus offers induce

claimants to accept lower paying jobs (Decker, O’Leary and Woodbury 2002, p. 164). However,

that might not be the case under the proposed PRA design with 60 percent of the balance paid

upon reemployment and a fixed $3,000 grant regardless of prior earnings history. In particular,

low wage workers may be induced to accept any paying job to qualify for a quick $1,800

payment. A PRA design with the grant set at a multiple of the WBA above a minimum value

should be considered. 

We also examined the proposed and alternative rules for allocation to service delivery

regions (SDR) within the state. Under the proposed rule which allocates money based on the

SDR share of state unemployment, it will be impossible to set a single threshold for PRA
31

enrollment based on the statewide distribution of WPRS profiling scores. Exhausting SDR

budget allocations would require PRA offers to profiled claimants anywhere between the top 20

percent and the top 40 percent of the state-wide distribution of WPRS scores. On average about

the 27 percent of the WPRS ranking in any SDR would be given an offer with a range from 20 to

36 percent at the top of the distribution. We also report simulation results for SDR allocations

based on shares of valid new UI claims. 

Finally, it should be reiterated that the simulation results discussed in this report presume

that all PRA offers made to targeted UI claimants are accepted, but that might not be the case. 

If only a fraction of offers are accepted, then the number of offers made can be scaled up

accordingly. For example if an 80 percent acceptance rate occurs, like in the Illinois

reemployment bonus experiment, then 25 percent more offers could be made. The PRA

acceptance rate is one of the parameters that should be monitored by states during PRA

implementation, and first year enrollment. 

The introduction of PRA offers into the UI system may have effects beyond changes in

the mean duration of benefit receipt. Two particular cautions have been raised regarding

reemployment bonus offers. These are known as entry and displacement effects (Meyer 1995). 

Under usual conditions in the United States, only about two-thirds of those eligible for UI

benefits actually claim and collect them during a spell of joblessness (Blank and Card 1991). 

The availability of a cash bonus could induce some job-separated people to enter the UI system

and claim benefits while in the absence of a possible bonus offer they otherwise would have

quickly accepted a new job. Displacement would occur if a cash bonus offer increases

reemployment of those offered the bonus at the expense of some of those not offered the bonus. 
32

However, UI entry effects from the bonus are much less likely if bonus offers are “targeted to

those workers whose characteristics are highly correlated with long-term unemployment”

(Executive Office of the President, Council of Economic Advisers 2003, p. 125). Targeting PRA

offers would also mollify any displacement effects since only a fraction of UI claimants would

be given offers. 
33

Table 1

Summary of Sample Size for PRA Analysis

Selection Criteria Resulting Sample Size

Georgia UI Data Currently Available (*1) 851,054

Start of WIA to Present (7/1/00 - 9/30/01) 318,837

Clients Have a Profiling Score 232,617

Clients Have 20 or More Weeks of Entitlement 156,220

Final Sample Size (*2) 156,181

 Employed 1st Period (E1,*3) 90,299

 Employed 2nd Period (E2, *4) 66,175

 Training/Intensive Services in 1st Period (S1) 36,483

 Training/Intensive Services in 2nd Period (S2) 11,411

(*1) Based on clients’ most recent UI claim covering Benefit Year Begin dates (BYB) January 1,

1996 through September 30, 2001. Since the analysis requires complete benefit year information,

September 30, 2001 marks the latest inflow date for which all UI compensation and services

information is known, given the data currently available to the Upjohn Institute.

(*2) Although only monetarily valid claims are included in the sample, 30 observations were

excluded because no wage data were found in the five quarters preceding the benefit year begin

date. Another 9 observations were excluded due to missing data needed to solve the new Georgia

profiling model for the simulations.

(*3) This is the number of persons whose full-time equivalent weeks of unemployment is 13

weeks or less. Full-time equivalent weeks is defined as total UI compensation received in the

benefit year divided by the weekly benefit amount. Since week-by-week UI compensation data

are not available, this is meant to proxy the first spell of unemployment.

(*4) Based on the three quarters of wage data following the quarter in which the benefit year

begin date occurred. A client is considered employed in the second period if some wages are

present in the first and third quarters following the quarter in which the BYB occurs and wages

total $2000 or more in the second quarter following the BYB. 
34

Table 2

Intensive, Supportive, and Training Service Usage

During the First 13 weeks and the Remainder of the UI Benefit Year

Georgia UI Claimants July 1, 2000 to September 30, 2001

First 13 Weeks After 13 Weeks

Service Type Service Description Participants Rate Participants Rate

Intensive Service Coordination 773 0.0049 278 0.0018

Intensive Customer Service Plan 29,456 0.1886 7,141 0.0457

Intensive In-Depth Assessment 159 0.0015 68 0.0006

Intensive Counseling 31,722 0.2031 7,939 0.0508

Intensive Expanded Workshop 588 0.0038 486 0.0031

Supportive Supportive Services 2,617 0.0168 1,006 0.0064

Training Job Skill Training 4,229 0.0207 2,795 0.0179
35

Table 3

State-wide Service Participation Rate Summary

First 13 Weeks After 13 Weeks

Variable Service Description Sample Size Participants Rate Participants Rate

i1 Service Coordination 156,181 773 0.0049 278 0.0018

i2 Customer Service Plan 156,181 29,456 0.1886 7,141 0.0457

i3 In-Depth Assessment 107,126 159 0.0015 68 0.0006

i4 Counseling 156,181 31,722 0.2031 7,939 0.0508

i5 Expanded Workshop 156,181 588 0.0038 486 0.0031

c18 Supportive Services 156,181 2,617 0.0168 1,006 0.0064

t Training 156,181 4,229 0.0207 2,795 0.0179

Total Intensive/Supportive/Training 156,181 36,483 0.2336 11,411 0.0731

c00 Job Referral 156,181 34,308 0.2197 26,305 0.1684

c01 Order Search 156,181 84,616 0.5418 31,987 0.2048

c02 Job Search Planning 156,181 40,549 0.2596 18,752 0.1201

c03 Service Needs Eval 156,181 64,987 0.4161 8,627 0.0552

c04 Orientation 156,181 56,767 0.3635 4,114 0.0263

c04W Orientation w/ Workshop 107,126 23,104 0.2157 1,982 0.0185

c05 ERP 156,181 57,609 0.3689 27,730 0.1776

c07 Specific LMI 156,181 113,288 0.7254 38,118 0.2441

c08 Resume Preparation 156,181 11,193 0.0717 4,334 0.0277

c10 Workshopsa 156,181 38,425 0.2460 10,992 0.0704

c101 RePlace Yourself 107,126 7,354 0.0686 582 0.0054

c102 Financial/Stress 107,126 2,240 0.0209 874 0.0082

c103 Resume 107,126 3,032 0.0283 1,284 0.0120

c104 Internet 107,126 1,838 0.0172 1,109 0.0104

c105 Interviewing 107,126 3,683 0.0344 1,831 0.0171

c106 Retention 107,126 134 0.0013 99 0.0009

c107 Applications 107,126 1,159 0.0108 564 0.0053

c108 Networking 107,126 2,625 0.0245 1,342 0.0125

c10A Other Workshop 107,126 4,969 0.0464 3,660 0.0342

c11 Job Search Assistance 156,181 37,211 0.2383 19,714 0.1262

c12 Call-In 156,181 6,561 0.0420 4,561 0.0292

c13 Job Development 156,181 6,976 0.0447 3,809 0.0244

c14 Job Finding Club 156,181 86 0.0006 54 0.0003

c15 Test 156,181 858 0.0055 626 0.0040

c16 Bonding Assistance 156,181 150 0.0010 70 0.0004

c20 REU/Profiled 156,181 47,177 0.3021 65 0.0004

pro Profiling/CAP 156,181 57,837 0.3703 11,571 0.0741

a

 For participation after January 1, 2001 data on the specific type of workshop is also available. 
36

Table 4

State-wide Service Participation Rate Summary for Top 30 Percent of Profiling Scores

First 13 weeks After 13 weeks

Variable Description Sample size Participants Rate Participants Rate

i1 Service Coordination 46855 283 0.0060 83 0.0018

i2 Customer Service Plan 46855 14,836 0.3166 3,674 0.0784

i3 In-Depth Assessment 34431 63 0.0018 24 0.0007

i4 Counseling 46855 15,610 0.3332 3,920 0.0837

i5 Expanded Workshop 46855 94 0.0020 96 0.0020

c18 Ref to Support Services 46855 983 0.0210 311 0.0066

t Training 46855 2,289 0.0489 1,122 0.0239

Total Total Intensive/Training 46855 17,777 0.3794 5,221 0.1114

c00 Job Referral 46855 9,642 0.2058 7,395 0.1578

c01 Order Search 46855 27,301 0.5827 11,152 0.2380

c02 Job Search Planning 46855 15,024 0.3206 6,668 0.1423

c03 Service Needs Eval 46855 33,617 0.7175 2,851 0.0608

c04 Orientation 46855 30,939 0.6603 1,350 0.0288

c04W Orientation w/ Workshop 34431 13,449 0.3906 736 0.0214

c05 ERP 46855 32,126 0.6856 15,124 0.3228

c07 Specific LMI 46855 35,317 0.7538 13,025 0.2780

c08 Resume Preparation 46855 4,858 0.1037 1,601 0.0342

c10 Workshops 46855 20,852 0.4450 5,633 0.1202

c101 RePlace Yourself 34431 3,717 0.1080 247 0.0072

c102 Financial/Stress 34431 1,280 0.0372 486 0.0141

c103 Resume 34431 1,915 0.0556 704 0.0204

c104 Internet 34431 1,026 0.0298 583 0.0169

c105 Interviewing 34431 2,272 0.0660 922 0.0268

c106 Retention 34431 58 0.0017 34 0.0010

c107 Applications 34431 770 0.0224 312 0.0091

c108 Networking 34431 1,492 0.0433 701 0.0204

c10A Other Workshop 34431 2,944 0.0855 1,948 0.0566

c11 Job Search Assistance 46855 16,241 0.3466 8,582 0.1832

c12 Call-In 46855 2,124 0.0453 1,374 0.0293

c13 Job Development 46855 2,614 0.0558 1,363 0.0291

c14 Job Finding Club 46855 26 0.0006 17 0.0004

c15 Test 46855 485 0.0104 334 0.0071

c16 Bonding Assistance 46855 39 0.0008 17 0.0004

c20 REU/Profiled 46855 30,620 0.6535 24 0.0005

pro Profiling/CAP 46855 32,725 0.6984 5,812 0.1240
37

Table 5

Prices for Intensive, Supportive, and Training Services

Georgia UI Claims Total Cost Service

7/1/2000 to 9/30/2001 Services Factor Price

Intensive Services

Service coordination 1,051 1.0 $356

Customer service plan 36,597 1.0 $356

In -Depth Assessment 227 2.0 $712

Counseling 39,661 2.0 $712

Expanded workshop 1,074 2.0 $712

Supportive Services 3,623 3.0 $1,068

Training Services 7,024 4.0 $1,424
38

Table 6

UI and Demographic Summary by Bonus Qualification / Service Receipt Group

Group Size

Proportion

of total

sample

Entitled

weeks

FTE

Weeks

Mean WBA 

(New Max) Age < 25 Age > 45

Income,

bottom

25%

E11S00 42,517 0.272 23.8 3.3 252 0.102 0.226 0.235

E11S10 10,329 0.066 24.1 5.7 258 0.070 0.263 0.203

E11S01 436 0.003 23.4 4.3 243 0.062 0.230 0.298

E11S11 325 0.002 23.9 6.4 256 0.052 0.269 0.206

Group E11 Total 53,607 0.343 23.8 3.8 253 0.095 0.234 0.230

E10S00 30,179 0.193 23.3 2.1 231 0.135 0.244 0.368

E10S10 5,474 0.035 23.6 5.0 234 0.100 0.296 0.344

E10S01 683 0.004 22.7 1.9 200 0.204 0.201 0.564

E10S11 356 0.002 23.0 3.6 213 0.141 0.220 0.461

Group E10 Total 36,692 0.235 23.3 2.5 231 0.131 0.251 0.369

E01S00 8,624 0.055 23.9 19.4 263 0.057 0.281 0.163

E01S10 2,656 0.017 24.0 18.8 261 0.057 0.283 0.179

E01S01 263 0.002 23.9 19.8 259 0.057 0.313 0.205

E01S11 1,025 0.007 23.9 19.9 258 0.049 0.326 0.185

Group E01 Total 12,568 0.080 23.9 19.3 262 0.056 0.286 0.169

E00S00 34,976 0.224 24.0 22.9 258 0.061 0.347 0.202

E00S10 10,015 0.064 24.0 22.7 257 0.056 0.375 0.207

E00S01 2,020 0.013 23.7 23.1 252 0.059 0.326 0.238

E00S11 6,303 0.040 23.9 23.2 253 0.047 0.414 0.232

Group E00 Total 53,314 0.341 24.0 22.9 257 0.058 0.360 0.208

Total 156,181 1.000 23.8 11.3 250 0.088 0.285 0.250
39

Table 7

UI and Demographic Summary by Bonus Qualification / Service Receipt Group 

for the Top 30 Percent of the Profiling Distribution

Group Size

Proportion

of total

sample

Entitled

weeks

FTE

weeks

Mean

WBA

(original)

Mean

WBA

(new

max) Age < 25 Age > 45

Income,

bottom

25%

E11S00 7,501 0.160 24.2 5.3 256 270 0.047 0.338 0.143

E11S10 4,830 0.103 24.1 6.2 245 261 0.060 0.305 0.209

E11S01 53 0.001 23.7 5.2 248 263 0.000 0.245 0.245

E11S11 110 0.002 24.1 7.7 250 266 0.055 0.282 0.136

 E11 12,494 0.267 24.2 5.7 252 266 0.052 0.324 0.169

E10S00 3,983 0.085 24.2 4.7 250 264 0.052 0.417 0.184

E10S10 2,195 0.047 23.8 6.2 232 246 0.082 0.384 0.293

E10S01 81 0.002 24.2 3.3 244 261 0.086 0.321 0.235

E10S11 88 0.002 23.5 6.8 228 240 0.103 0.333 0.341

 E10 6,347 0.135 24.1 5.2 243 257 0.064 0.403 0.225

E01S00 2,730 0.058 23.8 19.3 255 268 0.037 0.327 0.142

E01S10 1,288 0.027 23.8 18.6 247 261 0.058 0.323 0.190

E01S01 72 0.002 23.8 20.4 247 261 0.056 0.394 0.194

E01S11 533 0.011 23.8 19.9 248 263 0.047 0.323 0.167

 E01 4,623 0.099 23.8 19.2 252 265 0.044 0.326 0.159

E00S00 13,856 0.296 24.1 23.2 253 266 0.037 0.427 0.168

E00S10 5,249 0.112 24.0 22.8 245 260 0.047 0.431 0.206

E00S01 802 0.017 23.9 23.5 250 263 0.024 0.406 0.176

E00S11 3,484 0.074 23.9 23.1 241 255 0.042 0.475 0.233

 E00 23,391 0.499 24.0 23.1 249 263 0.040 0.434 0.186

Total 46,855 1.000 24.1 15.6 249 263 0.046 0.390 0.184
40

Table 8

Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario, All Features

Bonus Costs

Spending for

Services

Group

Proportion

of sample 1st period 2nd period 1st period 2nd period

Extended

Compensation

 Spending for

group

Expected

budget impact

E11S00 0.160 $1,800 $1,200 $0 $0 $0 $3,000 $480

E11S10 0.103 1,118 745 1,137 0 0 3,000 309

E11S01 0.001 1,800 0 0 1,113 0 2,913 3

E11S11 0.002 970 0 1,383 629 0 2,982 7

E10S00 0.085 1,800 0 0 0 0 1,800 153

E10S10 0.047 1,109 0 1,151 0 0 2,261 106

E10S01 0.002 1,800 0 0 1,036 0 2,836 5

E10S11 0.002 1,017 0 1,305 668 0 2,990 6

E01S00 0.058 0 0 0 0 998 998 58

E01S10 0.027 0 0 1,181 0 472 1,652 45

E01S01 0.002 0 0 0 1,324 643 1,968 3

E01S11 0.011 0 0 1,168 1,060 249 2,476 28

E00S00 0.296 0 0 0 0 2,438 2,438 721

E00S10 0.112 0 0 1,180 0 1,396 2,576 289

E00S01 0.017 0 0 0 1,323 1,515 2,838 49

E00S11 0.074 0 0 1,195 1,062 606 2,862 213

Total 1.000 $618 $269 $444 $121 $1,023 $2,475 $2,475
41

Table 9

Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario

Bonus and Purchase Services

Bonus Costs Spending for Services

Group

Proportion of

total sample 1st period 2nd period 1st period 2nd period

 Spending for

group

Expected

budget impact

E11S00 0.160 $1,800 $1,200 $0 $0 $3,000 $480

E11S10 0.103 1,118 745 1,137 0 3,000 309

E11S01 0.001 1,800 0 0 1,113 2,913 3

E11S11 0.002 970 0 1,383 629 2,982 7

E10S00 0.085 1,800 0 0 0 1,800 153

E10S10 0.047 1,109 0 1,151 0 2,261 106

E10S01 0.002 1,800 0 0 1,036 2,836 5

E10S11 0.002 1,017 0 1,305 668 2,990 6

E01S00 0.058 0 0 0 0 0 0

E01S10 0.027 0 0 1,181 0 1,181 32

E01S01 0.002 0 0 0 1,324 1,324 2

E01S11 0.011 0 0 1,168 1,060 2,228 25

E00S00 0.296 0 0 0 0 0 0

E00S10 0.112 0 0 1,180 0 1,180 132

E00S01 0.017 0 0 0 1,323 1,323 23

E00S11 0.074 0 0 1,195 1,062 2,256 168

Total 1.000 $618 $269 $444 $121 $1,452 $1,452
42

Table 10

Breakdown of PRA Costs per Offer, Top 30 Percent, Baseline Scenario, Bonus Only

Bonus Costs Services Spending

Group

Proportion of

total sample 1st period 2nd period 1st period 2nd period

Spending for

group

Expected budget

impact

E11S00 0.160 $1,800 $1,200 $0 $0 $3,000 $480

E11S10 0.103 1,800 1,200 0 0 3,000 309

E11S01 0.001 1,800 0 0 0 1,800 2

E11S11 0.002 1,800 0 0 0 1,800 4

E10S00 0.085 1,800 0 0 0 1,800 153

E10S10 0.047 1,800 0 0 0 1,800 84

E10S01 0.002 1,800 0 0 0 1,800 3

E10S11 0.002 1,800 0 0 0 1,800 3

E01S00 0.058 0 0 0 0 0 0

E01S10 0.027 0 0 0 0 0 0

E01S01 0.002 0 0 0 0 0 0

E01S11 0.011 0 0 0 0 0 0

E00S00 0.296 0 0 0 0 0 0

E00S10 0.112 0 0 0 0 0 0

E00S01 0.017 0 0 0 0 0 0

E00S11 0.074 0 0 0 0 0 0

Total 1.000 $724 $316 $0 $0 $0 $1,040
43

Table 11

Average cost per PRA offer and total number of potential PRA offers 

over two years given the Georgia PRA budget 

PRA Scenario Average Cost Number of Offers

Bonus, services, exhaustee payments $2,475 34,473

 1-Week Impact 2,515 33,924

 2-Week Impact 2,551 33,446

Bonus and purchase services 1,452 58,760

 1-Week Impact 1,491 57,223

 2-Week Impact 1,528 55,838

Bonus only with free services 1,040 82,038

 1-Week Impact 1,086 78,564

 2-Week Impact $1,131 75,438
44

Table 12

Net Present Value (NPV) of Alternative PRA Use Choices

Bonus Services Only

Week Only Earnings Gain Quicker Job

1 $300 $300 $300

2 300 300 300

3 300 300 300

4 300 300 300

5 300 300 300

6 300 300 300

7 300 300 800

8 300 300 800

9 300 300 800

10 300 300 800

11 300 300 800

12 300 300 800

13 2,600 911 800

14 800 911 800

15 800 911 800

16 800 911 800

17 800 911 800

18 800 911 800

19 800 911 800

20 800 911 800

21 800 911 800

22 800 911 800

23 800 911 800

24 800 911 800

25 800 911 800

26 800 911 800

27 800 911 800

28 800 911 800

29 800 911 800

30 800 911 800

31 800 911 800

32 800 911 800

33 800 911 800

34 800 911 800

35 800 911 800

36 800 911 800

37 800 911 800

38 800 911 800

39 2,000 911 800

NPV $27,825 $27,818 $27,849
45

Table 13

Distribution of State PRA Budget Allocation to Service Delivery Regions (SDR)

Proportion of Georgia Budget Based on Percent

difference

SDR Region Unemployed UI claimants Unemployed UI claimants in budgets

1 Northern Georgia 0.084 0.111 $7,207,242 $9,427,818 30.8

2 Northern Georgia 0.042 0.051 3,621,775 4,330,839 19.6

3 Atlanta 0.379 0.344 32,349,487 29,369,643 -9.2

4 Northern Georgia 0.060 0.066 5,099,734 5,665,896 11.1

5 Northern Georgia 0.047 0.050 4,005,444 4,287,221 7.0

6 Balance of Georgia 0.050 0.050 4,279,412 4,273,305 -0.1

7 Balance of Georgia 0.065 0.063 5,555,561 5,395,353 -2.9

8 Balance of Georgia 0.051 0.054 4,314,201 4,599,510 6.6

9 Balance of Georgia 0.049 0.045 4,218,304 3,850,765 -8.7

10 Balance of Georgia 0.059 0.053 5,055,091 4,552,948 -9.9

11 Coastal Georgia 0.059 0.061 4,991,047 5,215,258 4.5

12 Coastal Georgia 0.054 0.051 4,622,701 4,351,445 -5.9

State total 1.000 1.000 $85,320,000 $85,320,000
46

Table 14

Service Delivery Region Top Percentages of Profiling

Distribution to Receive PRA Offers to Exhaust Budgets

Based on the State-wide Profiling Distribution

Top Percentage to Enroll Total Enrolled

SDR

Total

unemployed UI clients

Total

unemployed UI clients

1 31 41 2,494 3,199

2 32 36 1,294 1,501

3 19 17 11,577 10,332

4 30 33 1,958 2,126

5 30 32 1,404 1,506

6 30 30 1,480 1,480

7 30 29 1,945 1,883

8 29 31 1,625 1,714

9 41 37 1,360 1,229

10 29 24 1,585 1,396

11 36 38 1,570 1,636

12 27 25 1,523 1,426

Total 29,813 29,429
47

Table 15

Service Delivery Region Top Percentages of Profiling

Distribution to Receive PRA Offer to Exhaust Budgets

Based on the within-SDR Profiling Distribution

Top Percentage to Enroll Total Enrolled

SDR

Total

unemployed UI clients

Total

unemployed UI clients

1 26 34 2,504 3,274

2 24 28 1,276 1,489

3 20 18 11,305 10,174

4 28 31 1,930 2,138

5 24 25 1,450 1,510

6 25 25 1,488 1,488

7 29 28 1,933 1,866

8 28 30 1,610 1,726

9 36 33 1,349 1,236

10 29 26 1,584 1,420

11 27 28 1,563 1,622

12 21 20 1,510 1,438

29,502 29,380
48

Figure 1 

Matrix of Costs and Benefits for PRA Participants

Employment Services

Period 1 Period 2

Benefits Costs Benefits Costs

Employed

(=1)

Yes

(=1)

x

w1

(b1-cs-cT)

cz

cs

cT

w2

b2

cz

cs

cT

No 

(=0)

x

w1

b1

cz w2

b2

cz

Unemployed

(=0)

Yes

(=1)

x cz

cs

cT

x

w2

cz

cs

cT

No

(=0)

x cz x

w2

cz
49

Figure 2

Employment Status in PRA Time Periods

(Sample share/Targeted sample share)

Employed Period 1--

First 13 Weeks

Employed Period 2--After 13 Weeks

Yes = 1 No = 0

Yes = 1 E11 (.343/.267) E10 (.235/.135)

No = 0 E01 (.080/.099) E00 (.341/.499)

Figure 3

Employment and Services Use Status in PRA Time Periods

Employed Period 1--

First 13 Weeks

Employed Period 2--After 13 Weeks

Yes = 1 No = 0

Yes = 1

Services use if E11 Services use if E10

E11S11 E11S10 E10S11 E10S10

E11S01 E11S00 E10S01 E10S00

No = 0

Services use if E01 Services use if E00

E01S11 E01S10 E00S11 E00S10

E01S01 E01S00 E00S01 E00S00
50

Appendix A

A Spreadsheet for Simulations of Alternative

Personal Reemployment Account Designs

at the Sample Means 
51

Table B.1 PRA Simulation Based on Top 30 Percent According to New Profiling Model 

(Items in Bold May be Changed to Compute Alternate Simulations )

Service

Variable Description

Baseline

Prices

Enter

Alternative Change

i1 Service Coordination $356 $356 $0

i2 Customer Service Plan $356 $356 $0

i3 In-Depth Assessment $712 $712 $0

i4 Counseling $712 $712 $0

i5 Expanded Workshop $712 $712 $0

c18 Referred to Supportive Services $1,068 $1,068 $0

Training Training $1,424 $1,424 $0

PRA offer amount or WBA Multiple (*1) $3,000 3,000 $0

Georgia PRA budget allocation amount $85,320,000 $85,320,000 $0

Simulation results: Baseline Alternative Change

 Total cost per offer (no impact) $1,463 $1,463 $0

 Total cost per offer (1-week impact) $1,502 $1,502 $0

 Total cost per offer (2-week impact) $1,538 $1,538 $0

 Maximum offers (no impact) 58,317 58,317 0

 Maximum offers (1-week impact) 56,801 56,801 0

 Maximum offers (2-week impact) 55,467 55,467 0

(*1) When entering a dollar amount, minimum offer is $1500 and maximum is $3000. If amount entered does not fall

within that range, no simulation will be performed. If entering WBA multiple and resulting PRA offer does not fall

within that range, no simulation will be performed.
52

Table B.2 Services Participation Rates and Other Data Needed for Simulations

Service Categories and Cost Items E11

S00

E11

S10

E11

S01

E11

S11

E10

S00

E10

S10

E10

S01

E10

S11

E01

S00

E01

S10

E01

S01

E01

S11

E

S

i1 0.000 0.014 0.000 0.045 0.000 0.017 0.000 0.057 0.000 0.013 0.000 0.011 0i2 0.000 0.888 0.000 0.727 0.000 0.870 0.000 0.716 0.000 0.790 0.000 0.908 0i3 0.000 0.007 0.000 0.000 0.000 0.012 0.000 0.000 0.000 0.004 0.000 0.029 0i4 0.000 0.925 0.000 0.818 0.000 0.919 0.000 0.818 0.000 0.839 0.000 0.934 0i5 0.000 0.003 0.000 0.000 0.000 0.007 0.000 0.023 0.000 0.008 0.000 0.008 0c18 0.000 0.042 0.000 0.036 0.000 0.055 0.000 0.170 0.000 0.061 0.000 0.043 0training 0.000 0.080 0.000 0.355 0.000 0.087 0.000 0.205 0.000 0.163 0.000 0.092 0

Group proportion (no impact) 0.160 0.103 0.001 0.002 0.085 0.047 0.002 0.002 0.058 0.027 0.002 0.011 0

Group proportion (1-week impact) 0.167 0.107 0.001 0.003 0.089 0.050 0.002 0.002 0.051 0.024 0.001 0.011 0

Group proportion (2-week impact) 0.173 0.111 0.001 0.004 0.093 0.052 0.002 0.003 0.046 0.020 0.001 0.010 0

Group WBA (no impact) 269 259 259 264 265 248 256 241 267 259 260 261 Group WBA (1-week impact) 269 259 259 263 265 248 255 244 268 259 260 261 Group WBA (2-week impact) 269 259 255 266 265 248 254 245 268 259 264 260 Alternative group PRA offer amounts: No impact 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000  1-week impact 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000  2-week impact 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 Baseline costs for group, 1st period Service costs, no impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  Service costs, 1-week impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  Service costs, 2-week impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  1st bonus, no impact 1800 1113 1800 959 1800 1101 1800 9920000 1st bonus, 1-week impact 1800 1113 1800 959 1800 1101 1800 9920000 1st bonus, 2-week impact 1800 1113 1800 959 1800 1101 1800 9920000Alternative costs 1st period Service costs, no impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  Service costs, 1-week impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  Service costs, 2-week impact 0 1145 0 1401 0 1165 0 1347 0 1189 0 1196  1st bonus, no impact 1800 1113 1800 959 1800 1101 1800 9920000 1st bonus, 1-week impact 1800 1113 1800 959 1800 1101 1800 9920000 1st bonus, 2-week impact 1800 1113 1800 959 1800 1101 1800 9920000
53

Table B.3 Services Participation Rates AFTER First 13 Weeks by Group

E11

S00

E11

S10

D11

S01

E11

S11

E10

S00

E10

S10

E10

S01

E10

S11

E01

S00

E01

S10

E01

S01

E01

S11

i1 0.000 0.000 0.019 0.045 0.000 0.000 0.049 0.023 0.000 0.000 0.028 0.006 i2 0.000 0.000 0.358 0.491 0.000 0.000 0.309 0.477 0.000 0.000 0.111 0.833 i3 0.000 0.000 0.000 0.000 0.000 0.000 0.029 0.000 0.000 0.000 0.032 0.000 i4 0.000 0.000 0.358 0.609 0.000 0.000 0.395 0.636 0.000 0.000 0.292 0.886 i5 0.000 0.000 0.019 0.000 0.000 0.000 0.086 0.068 0.000 0.000 0.056 0.002 c18 0.000 0.000 0.132 0.064 0.000 0.000 0.123 0.182 0.000 0.000 0.236 0.030 training 0.000 0.000 0.528 0.400 0.000 0.000 0.444 0.227 0.000 0.000 0.542 0.105 Baseline costs for group, 2nd period Service costs, no impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  Service costs, 1-week impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  Service costs, 2-week impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  2nd bonus, no impact 1200 7420000000000 2nd bonus, 1-week impact 1200 7420000000000 2nd bonus, 2-week impact 1200 7420000000000Alternative costs for group, 2nd period Service costs, no impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  Service costs, 1-week impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  Service costs, 2-week impact 0 0 1200 639 0 0 1200 661 0 0 1343 1112  2nd bonus, no impact 1200 7420000000000 2nd bonus, 1-week impact 1200 7420000000000 2nd bonus, 2-week impact 1200 7420000000000Total group PRA spending Baseline (no impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308  Baseline (1-week impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308  Baseline (2-week impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308  Alternative (no impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308  Alternative (1-week impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308  Alternative (2-week impact) 3000 3000 3000 3000 1800 2266 3000 3000 0 1189 1343 2308 Baseline cost (no impact) 480 309 3 7 153 106 5 6 0 33 2 26 Baseline cost (1-week impact) 501 321 4 9 161 112 5 7 0 28 2 25 Baseline cost (2-week impact) 518 332 4 11 168 119 6 9 0 24 2 23 Alternative cost (no impact) 480 309 3 7 153 106 5 6 0 33 2 26 Alternative cost (1-week impact) 501 321 4 9 161 112 5 7 0 28 2 25 Alternative cost (2-week impact) 518 332 4 11 168 119 6 9 0 24 2 23 
54

Table B.4 PRA Simulation Based on Top 30 Percent According to New Profiling Model

Alternative with Prices set at Half 

(Items in Bold May be Changed to Compute Alternate Simulations )

Service

Variable Description

Baseline

Prices

Enter

Alternative Change

i1 Service Coordination $356 $178 -$178

i2 Customer Service Plan $356 $178 -$178

i3 In-Depth Assessment $712 $356 -$356

i4 Counseling $712 $356 -$356

i5 Expanded Workshop $712 $356 -$356

c18 Referred to Supportive Services $1,068 $534 -$534

Training Training $1,424 $712 -$712

PRA offer amount or WBA Multiple (*1) $3,000 3,000 $0

Georgia PRA budget allocation amount $85,320,000 $85,320,000 $0

Simulation results: Baseline Alternative Change

 Total cost per offer (no impact) $1,463 $1,253 -$210

 Total cost per offer (1-week impact) $1,502 $1,296 -$206

 Total cost per offer (2-week impact) $1,538 $1,337 -$202

 Maximum offers (no impact) 58,317 68,111 9,794

 Maximum offers (1-week impact) 56,801 65,841 9,039

 Maximum offers (2-week impact) 55,467 63,833 8,366

(*1) When entering a dollar amount, minimum offer is $1500 and maximum is $3000. If amount entered does not fall

within that range, no simulation will be performed. If entering WBA multiple and resulting PRA offer does not fall

within that range, no simulation will be performed.
55

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