United States Government Accountability Office

GAO Testimony before the Subcommittee on 

Human Resources, Committee on Ways 

and Means, House of Representatives

UNEMPLOYMENT 

INSURANCE 

Factors Associated with 

Benefit Receipt and 

Linkages with 

Reemployment Services for 

Claimants 

Statement of Sigurd R. Nilsen, Director, 

Education, Workforce, and Income Security 

For Release on Delivery

Expected at 2:00 p.m. EST 

Wednesday, March 15, 2006

 

GAO-06-484T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2006

UNEMPLOYMENT INSURANCE 

Factors Associated with Benefit Receipt 

and Linkages with Reemployment 

Services for Claimants 

Highlights of GAO-06-484T, a report to the 

Subcommittee on Human Resources, 

Committee on Ways and Means, House of 

Representatives 

www.gao.gov/cgi-bin/getrpt?GAO-06-484T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Sigurd Nilsen at 

(202) 512-7215 or nilsens@gao.gov. 

Unemployment Insurance (UI) has 

been a key component in ensuring

the financial security of America’s 

workforce for over 70 years. In 

fiscal year 2004, UI covered about 

129 million wage and salary

workers and paid about $41 billion 

in benefits to nearly 9 million 

workers. With unemployed 

workers at a greater risk of longterm unemployment than in the

past, it is increasingly important to 

understand how individual workers

are being served by UI. This

testimony draws upon the results

of three GAO reports providing 

new information about (1) the 

extent to which individual workers 

ever receive UI benefits or receive 

benefits multiple times, (2) the 

types of workers who are more 

likely to receive UI, and (3) what is

known about the extent to which

UI beneficiaries receive

reemployment services and their 

reemployment outcomes.

GAO is not making new 

recommendations at this time. The 

Department of Labor (Labor)

generally agreed with the findings

from each of the three reports on

UI, but took issue with GAO’s 

recommendation that the Secretary

work with states to consider 

collecting more comprehensive

information on UI claimants’ 

services and outcomes. Labor 

commented that, in its view, 

current and planned efforts would

provide sufficient information for 

policy makers. However, we

believe that Labor's efforts would 

not provide a complete picture of 

UI claimants' services and

outcomes. 

On the basis of our analysis of a nationally representative sample of workers 

born between 1957 and 1964, we estimate that, while 76 percent of these 

workers experienced at least one period of unemployment during the first 

half of their working lives in which they would likely have been eligible for 

UI benefits, about 38 percent actually received UI. Of those who received UI 

benefits, 44 percent received them more than once. 

Among workers who are eligible to receive UI benefits, those who are more 

likely to actually receive these benefits are younger, have higher earnings 

before becoming unemployed, have completed more years of education, or 

have already received UI benefits in the past than otherwise similar workers. 

Past experience with the UI program has a particularly strong effect on the 

likelihood of receiving UI benefits. In addition, unemployed workers tend to 

have longer periods of unemployment if they receive UI benefits, have

completed fewer years of education, have lower earnings before they 

become unemployed, or if they do not belong to unions. UI-eligible workers 

from certain industries, such as mining and manufacturing, are more likely 

than other workers to receive UI benefits. 

Across states, UI claimants have access to a variety of reemployment 

services, and states make use of UI program requirements to connect 

claimants with available services at various points in their claim. However, 

federal reporting requirements for states’ UI programs and for federally 

funded employment and training programs do not provide a full picture of 

the services received or the outcomes obtained by all UI claimants, and few 

states monitor the extent to which claimants are receiving these services or 

outcomes for these claimants, in par t because states’ information systems 

have limited capabilities. 

UI Benefit Receipt and Estimated UI Eligibility among Workers Born between 1957 and 1964 

(1979-2002) 

Unemployed at least once but never 

eligible for UI

39%

15%

Source: GAO analysis of NLSY79 data.

21%

Eligible and received UI once

17%

Eligible and received UI more than once

Employed at least once and 

subsequently never unemployed

Unemployed and eligible at least 

once but never received UI

9%

38%
Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to discuss GAO’s recent work related to the 

Department of Labor’s (Labor) Unemployment Insurance (UI) program, 

which has been a key component in ensuring the financial security of 

America’s workforce for over 70 years. The UI program is a federal-state 

partnership designed to partially replace lost earnings of individuals who 

become unemployed through no fault of their own and to stabilize the 

economy in times of economic downturn. In fiscal year 2004, the UI 

program covered about 129 million wage and salary workers and paid 

about $41 billion in benefits to nearly 9 million workers who lost their 

jobs. Despite the size and scope of this program, there has been only 

limited information about how often the program is accessed by individual 

workers over time, the types of workers who are most likely to receive

benefits, or the extent to which claimants are receiving services that help 

them to become reemployed. 

Today, I will draw upon the results of three recent reports we have 

completed that provide new information about the extent to which 

individual workers are being served by the UI program. In particular, I will 

discuss (1) the extent to which individual workers ever receive UI 

benefits, including the extent to which they receive benefits multiple 

times, (2) the types of workers who are more likely to receive UI benefits, 

and (3) what is known about the extent to which UI beneficiaries receive 

reemployment services and their reemployment outcomes.1

To address the first and second questions, we analyzed data from the 

Bureau of Labor Statistics’ (BLS) National Longitudinal Survey of Youth 

1979 (NLSY79). The dataset contains very detailed information about the 

work and life experiences of a nationally representative sample of 

individuals who were born between 1957 and 1964. At the time of our 

analysis, the database contained over two decades’ worth of information 

gathered from interviews conducted between 1979 and 2002, and covered

a range of experiences, such as individuals’ work histories, incomes, 

family composition, and education. To address the third question, we 

conducted telephone interviews with UI and workforce development 

 1

The three reports discussed in this testimony are Unemployment Insurance: Better Data

Needed to Assess Reemployment Services to Claimants, GAO-05-413 (Washington, D.C.: 

June 24, 2005); Unemployment Insurance: Information on Benefit Receipt, GAO-05-291 

(Washington, D.C.: Mar. 17, 2005); and Unemployment Insurance: Factors Associated with

Benefit Receipt, GAO-06-341 (Washington, D.C.: Mar. 7, 2006). 

Page 1 GAO-06-484T 
officials in 50 states, sent a follow-up questionnaire to gather information 

on the strategies states use to collect data on UI claimants who receive

reemployment services, interviewed state and local program officials in 

Georgia, Maryland, Michigan, and Washington, and interviewed Labor 

officials and other experts in the area of UI and reemployment services. 

In summary, we estimate that while 76 percent of workers born between 

1957 and 1964 experienced at least one period of unemployment during 

the first half of their working lives in which they would likely have been 

eligible for UI benefits, about 38 percent actually received UI. Of those 

who received UI benefits, 44 percent received them more than once. 

Among workers who are eligible to receive UI benefits, those who are 

more likely to actually receive these benefits are younger, have higher 

earnings before becoming unemployed, have completed more years of 

education, or have already received UI benefits in the past than otherwise 

similar workers. The last factor—past experience with the UI program—

has a particularly strong effect on the likelihood of receiving UI benefits. 

In addition, we found that unemployed workers tend to have longer 

periods of unemployment if they receive UI benefits, have completed 

fewer years of education, have lower earnings before they become 

unemployed, or if they do not belong to unions than otherwise similar 

workers. UI-eligible workers from certain industries—such as mining and 

manufacturing—are more likely than other workers to receive UI benefits. 

In the area of helping UI claimants return to work, we found that across 

states, UI claimants have access to a variety of reemployment services, 

and although most states accept UI claims remotely by telephone or 

Internet, states make use of UI program requirements to connect 

claimants with available services at various points in their claim. However, 

federal reporting requirements for states’ UI programs and for federally 

funded employment and training programs do not provide a full picture of

the services received or the outcomes obtained by all UI claimants, and 

few states monitor the extent to which claimants are receiving these 

services or outcomes for these claimants, in part because states’ 

information systems have limited capabilities. GAO recommended that

Labor, working with the states, consider collecting more comprehensive 

information on UI claimants’ services and outcomes. 

The UI program was established by Title III of the Social Security Act in 

1935 and is a key component in ensuring the financial security of 

America’s workforce. The program serves two primary objectives: (1) to 

temporarily replace a portion of earnings for workers who become 

unemployed through no fault of their own and (2) to help stabilize the 

Background 

Page 2 GAO-06-484T 
economy during recessions by providing an infusion of consumer dollars 

into the economy. UI is made up of 53 state-administered programs that 

are subject to broad federal guidelines and oversight. In fiscal year 2004, 

these programs covered about 129 million wage and salary workers and 

paid benefits totaling $41.3 billion to about 8.8 million workers. 

Federal law provides minimum guidelines for state programs and 

authorizes grants to states for program administration. States design their 

own programs, within the guidelines of federal law, and determine key 

elements of these programs, including who is eligible to receive state UI 

benefits, how much they receive, and the amount of taxes that employers 

must pay to help provide these benefits. State unemployment tax revenues 

are held in trust by Labor and are used by the states to pay for regular 

weekly UI benefits, which typically can be received for up to 26 weeks. 

To receive UI benefits, an unemployed worker must file a claim and satisfy 

the eligibility requirements of the state in which the worker’s wages were 

paid. Generally, states require that workers must have a minimum amount 

of wages and employment over a defined base period, typically, about a 

year before becoming unemployed, and have not already exhausted the 

maximum amount of benefits or benefit weeks to which they would be 

entitled because of other recent unemployment. In addition workers must 

have become unemployed for reasons other than quitting a job or being 

fired for work-related misconduct, and be able and available to work. In 

order to demonstrate that they are able to work and available for work and 

are still unemployed, claimants must submit a certification of continuing 

eligibility—by mail, telephone, or Internet, depending on the state—

throughout the benefit period. This practice is usually done weekly or 

biweekly. States may continue to monitor claimant eligibility through an 

eligibility review program, in which certain claimants are periodically 

contacted to review their eligibility for benefits, work search activities, 

and reemployment needs.

Since UI was established, there have been two major changes in the 

nation’s workforce development system that have directly affected states’

UI programs. Specifically, in November 1993, Congress enacted legislation 

amending the Social Security Act to require that each state establish a 

Worker Profiling and Reemployment Services (WPRS) system and 

implement a process typically referred to as claimant profiling. The 

claimant profiling process uses a statistical model or characteristics 

screen to identify claimants who are likely to exhaust their UI benefits 

before finding work. Claimants identified through this process are then 

referred to reemployment services while they are still early in their claim. 

Page 3 GAO-06-484T 
For profiled claimants, participation in designated reemployment services 

becomes an additional requirement for continuing eligibility for UI 

benefits. The second major change was the enactment of the Workforce 

Investment Act of 1998, which requires states and localities to bring 

together about 17 federally funded employment and training services into

a single system—the one-stop system. State UI programs are mandatory 

partners in the one-stop system. Another mandatory partner is the federal

Employment Service, established by the Wagner-Peyser Act in 1933 to link 

job seekers with job opportunities. The Employment Service has 

historically been colocated with state UI offices to facilitate UI claimants’ 

access to federally funded labor exchanges, job search assistance, job 

referral, placement assistance, assessment, counseling, and testing. 

On the basis of our analysis of data from the Bureau of Labor Statistics’ 

National Longitudinal Survey of Youth 1979 (NLSY79), covering the 23-

year period from 1979 through 2002, we found that 85 percent of a 

nationally representative sample of late baby boom workers—workers 

born between 1957 and 1964—had experienced unemployment at least 

once between 1979 and 2002. Workers who experienced unemployment 

were unemployed an average of five times over this 23-year period. 

Moreover, we found that of the 76 percent who were eligible for UI 

benefits at least once, 38 percent had ever received UI. (See fig. 1.) Of 

those who received UI benefits, 44 percent received them more than once; 

this represents about 17 percent of all of the workers in this age group. 

Most Workers 

Experience 

Unemployment and 

Over a Third Receive 

UI at Least Once 

Page 4 GAO-06-484T 
Figure 1: UI Benefit Receipt and Estimated UI Eligibility among Workers Born 

between 1957 and 1964 (1979-2002) 

Unemployed at least once but never 

eligible for UI

39%

15%

Source: GAO analysis of NLSY79 data.

21%

Eligible and received UI once

17%

Eligible and received UI more than once

Employed at least once and 

subsequently never unemployed

Unemployed and eligible at least 

once but never received UI

9%

38%

Note: Total does not equal 100 because of rounding. 

When all other worker characteristics have been controlled for, 

unemployed workers who are eligible for UI benefits are more likely to 

receive UI if they had higher earnings before they became unemployed, 

are younger, have completed more years of education, or if they have a 

history of past UI benefit receipt. In addition, we found that unemployed 

workers tend to have longer periods of unemployment if they receive UI 

benefits, have completed fewer years of education, had lower earnings 

before they became unemployed, or if they do not belong to unions. We 

also found that UI-eligible workers from certain industries are more likely 

than other workers to receive UI benefits, and that the strength of the 

relationship between previous UI benefit receipt and current UI receipt 

also varies by industry. 

Some UI-Eligible 

Workers are More 

Likely to Receive UI 

Benefits than Others, 

or to Have Longer 

Periods of 

Unemployment 

Page 5 GAO-06-484T 
We found that UI-eligible workers with certain characteristics are more 

likely to receive UI than otherwise similar UI-eligible workers. In 

particular, the likelihood of receiving UI tends to increase as the amount 

earned in the year before a worker became unemployed increases. (See 

fig. 2.) For example, a UI-eligible worker with earnings ranging from 

$10,000 to just under $12,000 in the year before becoming unemployed has 

a 36 percent likelihood of receiving UI, whereas a worker who earned 

roughly twice as much has a 45 percent likelihood of receiving UI.2

 The 

relationship between higher earnings and a higher likelihood of receiving

UI benefits is also consistent with economic theory that predicts that 

workers with higher earnings prior to becoming unemployed will be more 

reluctant to accept lower reemployment wages and are therefore more 

likely to take advantage of UI benefits as a way to subsidize their job 

search efforts.3

Certain Characteristics of 

UI-Eligible Workers Are 

Associated with Greater 

Likelihood of UI Receipt 

 2

The average and maximum earnings for the unemployed workers in our sample are 

$15,524 and $597,950, respectively. 

3

For economic theory concerning the relationship between job search and unemployment

insurance, see Dale T. Mortensen, “Unemployment Insurance and Job Search Decisions,” 

Industrial and Labor Relations Review, vol. 30, no. 4 (1977). 

Page 6 GAO-06-484T 
Figure 2: Simulated Likelihood of Receiving UI Benefits for UI-Eligible Workers, by 

Prior Year Earnings

Note: Simulations are for the average likelihood of receiving UI during first-time unemployment at 

different levels of earnings. The overall average likelihood of receiving UI during first-time 

unemployment is 33 percent. See appendix I of GAO-06-341 for methodology and estimation results.

We also found that the likelihood of receiving UI benefits among UIeligible workers tends to be higher for younger workers, and lower for 

older workers. Specifically, simulations based on our analysis results show 

that the likelihood of receiving UI peaks at about age 25 and decreases 

thereafter. In fact, a 25-year-old unemployed worker who is eligible for UI 

is more than twice as likely to receive UI as an otherwise similar 40-yearold. This finding is contrary to previous studies that reported that younger 

workers are less likely to receive UI benefits than older workers.4

 4

See Rebecca M. Blank and David E. Card, “Recent Trends in Insured and Uninsured 

Unemployment: Is There an Explanation?” The Quarterly Journal of Economics, vol. 106, 

no. 4 (1991) and Brian P. McCall, “Repeat Use of Unemployment Insurance,” in Laurie J. 

Bassi and Stephen A. Woodbury, editors, Long-Term Unemployment and Reemployment 

Policies (Stamford, Connecticut: JAI Press, 2000). 

Page 7 GAO-06-484T 
However, these previous studies did not include as much information 

about workers’ past unemployment and UI benefit receipt histories as our 

analysis. Therefore, because older workers have more previous 

unemployment and UI benefit receipt experience than younger workers, it 

is possible that our analysis controlled for the effect of these experiences 

more completely than previous studies, resulting in a more precise 

estimate of the effect of age. Although we are unable to explain why 

younger workers are more likely to receive UI benefits, it is possible that 

older workers, who have had more time to accumulate financial assets, 

may have more private resources available to help them cope with 

unemployment than younger workers.5

 Or it may simply be the case that 

younger workers are less optimistic than older workers about how long it 

will take for them to become reemployed. 

Another characteristic associated with a greater likelihood of receiving UI 

benefits is education. We found that UI-eligible workers who have 

completed more years of education are more likely to receive UI benefits

than otherwise similar workers with fewer years of education. For 

example, a UI-eligible worker with the equivalent of a college education 

(16 years of schooling) when he or she becomes unemployed is almost 

one-fifth more likely to receive UI than a UI-eligible worker with a high 

school education (12 years of schooling).6

 Although the effect of education 

on the likelihood of receiving UI benefits has been analyzed in other 

research, no significant education effect was found.7

 Still, our result seems 

logical. That is, to the extent that workers with more education are also 

better able to obtain UI program information and to understand their 

states’ requirements for filing claims and remaining eligible for benefits, 

they are also more likely to have successful benefit claims. 

Other factors, including a worker’s gender, marital status, job tenure, and

the local unemployment rate, are also associated with UI benefit receipt.

Controlling for all other characteristics among UI-eligible workers, we 

found that 

• a woman is 29 percent more likely to receive UI benefits than a man, 

 5

See Jonathan Gruber, “The Wealth of the Unemployed,” October 2001, Industrial and 

Labor Relations Review, vol. 55, no. 1. 

6

The average number of years of schooling completed by UI-eligible workers, at the time 

when they became unemployed, is 12 years. 

7

See Blank and Card. 

Page 8 GAO-06-484T 
• a married worker is 13 percent more likely to receive UI than an 

unmarried worker, 

• a longer-tenured worker is more likely to receive UI—for example, a 

worker with 4 years of tenure at his or her most recent job is 12 

percent more likely to receive UI than a worker with 1 year of job 

tenure, and 

• being in an area with high unemployment raises the likelihood that an 

unemployed worker will receive UI—for example, a worker living in an 

area with an unemployment rate of 9 percent is 10 percent more likely 

to receive UI than a worker living in an area with an unemployment 

rate of 5 percent. 

Our finding that women are more likely to receive UI benefits than 

otherwise similar men differs from the results of previous research, which 

generally found no statistically significant differences in the likelihood of

receiving UI benefits for men and women. However, our analysis controls 

for more worker characteristics than these previous studies, and it is likely 

that we have more carefully isolated the effect of gender from that of other 

characteristics that are related to gender, such as workers’ occupations 

and industries. Still, it is not immediately clear why women are more likely 

to receive UI benefits than men who are similar with respect to other 

observed characteristics. We are also unable to explain why married 

workers are more likely to receive UI benefits than otherwise similar 

unmarried workers.8

 Our finding that workers with longer job tenure are 

more likely to receive UI benefits is consistent with previous research. 

This result seems logical if we consider that workers with longer job 

tenures are more likely to have acquired more employer-specific skills 

than workers with shorter job tenures. Because such specialized skills are 

not as easy to transfer to a new employer as less specialized skills, 

workers with more job tenure may expect to take longer to find a job 

where these skills would be needed than a worker who has more 

generalized skills. Finally, our finding that workers living in areas with 

higher unemployment are more likely to receive UI benefits is probably 

due to the higher number of unemployed workers relative to available 

jobs, which may make workers more willing to apply for UI benefits as 

they engage in what are likely to be longer job searches. 

 8

We specifically tested for the effect of spousal income on the likelihood of receiving UI to

determine whether marital status was masking some underlying effect of additional family 

income, and found this not to be the case. 

Page 9 GAO-06-484T 
In contrast to the findings already discussed, we found that a key UI 

program element, the weekly UI benefit amount that unemployed workers 

are entitled to, is not associated with a greater likelihood of receiving UI 

benefits. Specifically, we used our model estimates to simulate benefit 

increases of 10 percent and 25 percent, and a decrease of 10 percent, and 

found that these changes did not affect the likelihood of UI benefit receipt 

among eligible workers. This finding is also consistent with the work of 

others, who have found that increases in the weekly benefit amount have 

mixed, but generally small, effects on UI benefit receipt, after controlling 

for other factors.9

 Taken together, these results suggest that UI benefit 

levels have modest effects on individuals’ decisions about whether or not 

to receive UI benefits. 

Unemployed Workers Who 

Received UI in the Past 

Are More Likely to Receive 

UI during Subsequent 

Unemployment 

Of all the characteristics associated with UI benefit receipt, we found that 

one—past UI receipt—had a particularly strong effect on the likelihood of 

receiving UI benefits. (See fig. 3.) For example, when workers experience

their first UI-eligible period of unemployment, their likelihood of receiving

UI is 33 percent. During a second UI-eligible period of unemployment, the 

likelihood of receiving UI is 48 percent for workers who received UI 

during the first unemployment period, but only 30 percent for workers 

who did not receive UI. Furthermore, the likelihood that these UI-eligible 

workers will receive UI benefits during successive periods of 

unemployment increases each time that they receive UI benefits and 

decreases each time that they do not.10

 9

 See David E. Card and Phillip B. Levine, “Unemployment Insurance Taxes and the 

Cyclical and Seasonal Properties of Unemployment,” Journal of Public Economics, vol. 53, 

no. 1 (1994); Patricia M. Anderson and Bruce D. Meyer, “The Effect of Unemployment 

Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data,” NBER Working 

Paper No. 4960, National Bureau of Economic Research, Cambridge, Massachusetts (1994); 

and Robert H. Topel, “On Layoffs and Unemployment Insurance,” American Economic

Review, vol. 73, no. 4 (1983). 

10 As noted above, relatively few UI-eligible workers who receive UI benefits receive them 

multiple times. See GAO-05-291 for a more complete discussion of the incidence of repeat

UI benefit receipt. 

Page 10 GAO-06-484T 
Figure 3: Simulated Likelihood of Receiving UI Benefits for UI-Eligible Workers 

during Successive Periods of Unemployment, by Past UI Receipt Status

Note: Simulations are the average likelihood of receiving UI during a current unemployment period for 

two extreme cases: (1) workers who always received UI benefits during previous unemployment and 

(2) workers who never received UI during previous unemployment. The average likelihood of 

receiving UI during first-time unemployment for all UI-eligible workers is 33 percent. See appendix I of

GAO-06-341 for methodology and estimation results. 

This finding suggests that a worker’s first unemployment experience has a 

lasting and self-reinforcing effect. To the extent that all workers know 

about the UI program and whether or not they are eligible to receive 

benefits, receiving or not receiving UI may be a personal choice. Such a 

choice might be based on workers’ individual preferences, or may be 

related to other characteristics that were not captured in the NLSY79 data. 

On the other hand, if workers do not all have good information about UI, 

those who receive UI benefits may simply know more about the program 

than those who do not receive UI benefits, and their knowledge about the 

program may be improving each time they receive UI benefits. 

Page 11 GAO-06-484T 
We found that, overall, unemployed workers who receive UI benefits have 

longer unemployment duration than otherwise similar workers who do not 

receive UI benefits. Several other characteristics are also associated with

unemployment duration. In particular, UI-eligible workers are more likely 

to experience longer unemployment duration if they have lower earnings 

before becoming unemployed or if they have completed fewer years of 

education. Other characteristics associated with longer unemployment 

duration include being African-American, or female, or not belonging to a 

union. 

Receiving UI Benefits, 

along with Other Factors, 

Is Associated with 

Unemployment Duration 

Our results with respect to unemployment duration are generally 

consistent with the results of other research. In particular, researchers 

have suggested that the association between higher earnings and shorter 

periods of unemployment may be due, in part, to the higher cost of 

unemployment for workers with higher earnings, when compared to the 

cost for workers with lower earnings.11 For example, the cost of 

unemployment can be measured in terms of lost wages. This cost is 

greater for workers with higher earnings, because they forego a higher 

amount of potential earnings in exchange for the time they can spend on 

unpaid activities, such as job search, home improvement, or recreation.

Researchers have also suggested that the association between less 

education and longer periods of unemployment may be a result of workers 

with less education having fewer work-related skills.12 Two possible 

explanations for the differences in employment outcomes for AfricanAmerican workers include labor market discrimination, and limited access 

to social networks that may enable these workers to find jobs more 

quickly.13 Likewise, longer unemployment duration among female workers 

may be due to labor market discrimination, or to differences in how 

 11See Bruce D. Meyer, “Unemployment Insurance and Unemployment Spells,” 

Econometrica, vol. 58, no. 4 (1990). 

12See Karen E. Needels and Walter Nicholson, An Analysis of Unemployment Durations 

Since the 1990-1992 Recession, UI Occasional Paper 99-6, prepared for the Department of

Labor, 1999. 

13See Antoni Calvó-Armengol, and Matthew O. Jackson, “The Effects of Social Networks on

Employment and Inequality,” The American Economic Review, vol. 94, no. 3, (2004) for a

discussion of the effects of individuals’ social networks on employment outcomes. 

Page 12 GAO-06-484T 
women value paid work versus nonemployment activities, relative to 

men.14

The associations between shorter unemployment duration and union 

membership, and to longer job tenure, may reflect the greater access that 

these workers may have to reemployment opportunities, through union 

hiring halls or through informal peer networks. It may also reflect a

greater likelihood of being recalled to previous jobs.15

UI-Eligible Workers from 

Certain Industries Are 

More Likely to Receive UI 

and to Have Longer

Periods of Unemployment 

We found that first-time unemployed workers from mining and 

manufacturing are more likely to receive UI than workers from other 

industries. (See table 1.) For example, first-time unemployed workers from

the manufacturing industry are about two-thirds more likely to receive UI 

benefits than workers from the professional and related services industry. 

We also found that the association between past and current UI benefit 

varies across industries. This effect is strongest for UI-eligible workers 

from the public administration sector, and weakest for workers from 

agriculture and construction.16

 14 See Needels and Nicholson, and GAO, Women’s Earnings: Work Patterns Partially

Explain Differences between Men’s and Women’s Earnings, GAO-04-35 (Washington, D.C.:

Oct. 31, 2003). 

15 See Needels and Nicholson. 

16 Although the association between past UI receipt and current UI receipt is statistically 

significant for all industries combined, differences in this association among industries 

were statistically significant only for public administration, agriculture, and construction. 

Page 13 GAO-06-484T 
Table 1: Simulated Likelihood of Receiving UI Benefits during Different Periods of

UI-Eligible Unemployment for Workers with Past UI Receipt, by Industry 

Simulated likelihood of receiving UI benefits during

current UI-eligible unemployment period, given past UI 

receipt (percent) 

Industry 

First unemployment 

perioda

Second 

unemployment 

period 

Third

unemployment 

period 

Mining 46 57 69

Manufacturing 40 52 65

Public administration 37 68 91

Wholesale and retail 

trade 35 52 70

Agriculture, forestry, and 

fishing 34 42 50

Business services 31 48 66

Construction 31 40 51

Finance, insurance, real

estate 31 64 91

Transportation and 

public utilities 29 46 66

Entertainment and 

recreation services 26 45 67

Professional and related 

services 24 39 58

Personal services 23 38 56

All industries 33 48 64

Source: Simulations based upon GAO analysis of NLSY79 data. 

Note: Simulations are the average likelihood of receiving UI during a first unemployment period, a 

second unemployment period with UI receipt during the prior unemployment period, and a third 

unemployment period with UI receipt during both prior unemployment periods. The positive effect that 

each prior UI receipt period has on the likelihood of current UI receipt is statistically significantly larger

for the public administration industry relative to the professional and related services industry at the 

95 percent confidence level, and smaller for the agriculture and construction industries. The 

simulations also incorporate the industry effects and the industry interactions with the number of prior 

periods of unemployment. See appendix I of GAO-06-341 for methodology and estimation results. 

a

Workers experiencing their first period of unemployment did not have past UI receipt. 

These results show that although UI-eligible workers in some industries 

are more likely to receive UI benefits when they experience 

unemployment for the first time, their likelihood of receiving UI benefits 

again when they become unemployed a second or third time is not 

necessarily higher than it is for workers from other industries. (See fig. 4.)

For example, the likelihood of receiving UI benefits for workers from the 

Page 14 GAO-06-484T 
manufacturing industry who are unemployed for the first time is relatively 

high—about 40 percent. This likelihood increases to 52 percent during a 

second period of unemployment for workers who have already received 

UI benefits, and 65 percent during a third period of unemployment for 

workers who received UI each previous time they were unemployed. By

comparison, the increase in the likelihood of receiving UI between the first 

and third periods of unemployment is higher for most other industries, 

especially public administration. Specifically, the likelihood of receiving

UI benefits for public administration workers who are unemployed for the 

first time is 37 percent. This likelihood increases to 69 percent during a 

second period of unemployment for workers who received have already 

received UI, and to 91 percent during a third period of unemployment for 

workers who received UI each previous time they were unemployed. 

Figure 4: Simulated Effect of Past UI Benefit Receipt on the Likelihood of Receiving

UI in Subsequent Periods of Unemployment, for Selected Industries

Page 15 GAO-06-484T 
Note: Simulations are the average likelihood of receiving UI during a first unemployment period, 

second unemployment period with UI receipt during the prior unemployment period, and a third 

unemployment period with UI receipt during both prior unemployment periods. The positive effect that 

each prior UI receipt period has on the likelihood of current UI receipt is statistically significantly larger

for the public administration industry relative to the professional and related services industry at the 

95 percent confidence level, and smaller for the agriculture and construction industries. The 

simulations also incorporate the industry effects and the industry interactions with the number of prior 

periods of unemployment. See appendix I of GAO-06-341 for methodology and estimation results. 

Administrative unemployment insurance data have shown that repeat UI 

recipients tend to be from industries that are seasonal, such as 

manufacturing and construction. Our results, however, suggest that this is 

not because workers with past UI receipt from these industries are more 

likely to receive UI benefits when they are unemployed than otherwise 

similar workers from other industries. Rather, it may be that workers from

such seasonal industries are unemployed more often on average than 

workers from other industries, or that a larger proportion of unemployed

workers from such industries have collected UI previously. 

In light of the strong association we found between UI receipt and 

unemployment duration, it is important that unemployed workers who 

become UI claimants have access to reemployment services that will help 

facilitate their quick return to work. However, the shift towards states’ 

accepting UI claims remotely has raised concerns that some UI claimants 

may not be receiving enough information on reemployment services or 

timely assistance to help them find a job, and little is known about 

whether states have policies in place to help unemployed workers quickly 

become reemployed. 

In our review of states’ efforts to facilitate reemployment of UI claimants, 

we found that across states, UI claimants have access to a variety of 

reemployment services, and although most states accept UI claims 

remotely by telephone or Internet, states make use of UI program 

requirements to connect claimants with available services at various 

points in their claims. However, despite states’ efforts to design systems 

that link UI claimants to reemployment services, little data are available to 

gauge the extent to which claimants are receiving these services or the 

outcomes they achieve. Federal reporting requirements for states’ UI 

programs and for federally funded employment and training programs do

not provide a full picture of services or outcomes, and few states monitor 

the extent to which claimants are receiving these services or outcomes for 

these claimants, in part because of limited information systems 

capabilities. 

A Variety of 

Reemployment 

Services Are Available 

to Help UI Claimants 

Get Jobs, but Little 

Information Exists to 

Determine the Extent 

to Which Workers Use 

Them 

Page 16 GAO-06-484T 
Although Some Federally 

Funded Reemployment 

Services Are Universally 

Accessible, Most Serve 

Targeted Groups of 

Workers

UI claimants in all states have access to the range of Wagner-Peyser 

funded employment services and to Workforce Investment Act (WIA) 

funded core services that are available to all job seekers through the onestop system. Such services include labor exchange services in all states, 

whereby claimants can access job listings and information on their state’s 

labor market trends using the Internet. Officials in many states said that 

claimants also have access to online labor exchange, or job matching 

services as well as other self-assessment services. One-stop centers in all 

states make computers available on-site, and most states provide access to 

self-help software, such as aptitude tests, computer tutorials, or job search

guidance, at the centers. Claimants also have access to a variety of staffassisted reemployment services through the one-stop system. Officials 

most often mentioned that claimants were likely to be offered 

• job search assistance; 

• résumé assistance; 

• job matching, referral, and placement services; 

• orientation to services; 

• referral to WIA or other partners; 

• initial or general needs assessment; 

• counseling; and 

• interview assistance. 

In addition to states’ Employment Service and WIA core services, the WIA

Adult and Dislocated Worker programs provide for additional levels of 

services to qualified workers. Intensive services include activities that 

require greater staff involvement than core services, and may include

services such as comprehensive assessment and case management. 

Intensive services are available to adults and dislocated workers who have 

received at least one core service and are unable to find a job or have a job 

that does not lead to self-sufficiency. Training services, such as

occupational skills or on-the-job training, are available on a more limited

basis, typically to claimants who have received at least one intensive 

service but who are still unable to obtain or retain employment. Additional 

training assistance for workers who are laid off as a result of international 

trade is available through the Trade Adjustment Assistance (TAA) 

program, although the amount of funds available for training is limited by 

statute. 

Page 17 GAO-06-484T 
Although all UI claimants can access the range of reemployment services 

through the one-stop system at any time, UI requirements often provide 

the context for states’ efforts to link claimants to reemployment services. 

Specifically, all federally approved state UI programs require that 

claimants be able and available to work. To meet these conditions, 44 

states require that UI claimants register with the state’s Employment 

Service in order to be eligible for UI benefits. In addition, 49 states impose 

a work search requirement as a condition for continuing UI eligibility, and 

claimants must document that they are meeting their state’s work search 

requirement in a number of ways. Most commonly, claimants are required 

to keep a log of work search activities that may be subject to review, or 

they must certify that they are able and available to work through the 

process of filing for a continuing claim. 

States Use Program 

Requirements to Connect 

Claimants with Available 

Services 

These work registration and work search requirements often serve to link

claimants to reemployment services. The process of registering for work 

with the state’s labor exchange, for example, may bring claimants into an 

Employment Service office or one-stop center where reemployment 

services are delivered. Officials in nearly two-thirds of the 44 states where 

claimants are required to register for work told us that coming into an 

Employment Service office or one-stop center is either a required part of 

the process or one of the options claimants have for completing their 

registration. Officials in close to a third of the states with this requirement 

told us claimants are registered with the labor exchange when they file

their initial UI claim. 

Some states also use their processes for monitoring compliance with the 

work search requirement to direct claimants to reemployment services. 

Officials in 39 of the 49 states that require claimants to actively seek 

employment told us that telephone or in-person interviews with claimants 

may be used to monitor compliance with this requirement. In over twothirds of these states, officials told us that some information on job search 

strategies or reemployment services is provided during the interview. 

States also engage some claimants in reemployment services directly 

through programs that identify certain groups for more targeted 

assistance. In particular, states target reemployment services to claimants 

who are identified through federally required claimant profiling systems—

a process that uses a statistical model or characteristics screen to identify

claimants who are likely to exhaust their UI benefits before finding work. 

Claimants identified through this process are then referred to

reemployment services while they are still early in their claim. Although 

profiled claimants can access the services available to all job seekers 

Page 18 GAO-06-484T 
through the one-stop system, participation in the services they are referred 

to is mandatory. State officials most often identified orientation and 

assessment as services that profiled claimants were required to receive. In

addition, many officials told us that the services profiled claimants 

received depended on their individual needs following an assessment, the 

development of an individual plan, or the guidance of staff at a one-stop 

center. While failure to report to required reemployment services can 

result in benefits being denied, states vary in the conditions that prompt 

denying benefits. 

From 2001 through last year, states made use of Labor’s Reemployment 

Services Grants to fund these services.17 Although these grants are no 

longer available, officials in the majority of the states we interviewed told 

us their states had been using the Reemployment Services Grant funds to 

hire staff to provide reemployment services. Some states have also used

these grants to direct reemployment services to claimants beyond those 

who have been profiled and to support other enhancements in the 

provision of reemployment services to claimants. 

Little Information Exists to 

Provide a Complete 

Picture of Reemployment 

Services for 

Unemployment Insurance 

Claimants 

Despite states’ efforts to design systems that link UI claimants to 

reemployment services, little is known about the extent to which 

claimants receive reemployment services or about the outcomes they 

achieve. Although states must meet a number of federal reporting 

requirements for their UI and employment and training programs, none of 

these reports provides a complete picture of the services received or the 

outcomes obtained by UI claimants, and only recently has Labor begun to

require that states provide information on the reemployment outcomes of 

UI claimants. We also found that few states monitor the extent to which 

claimants are receiving these services, and even fewer monitored 

outcomes for these claimants at the time of our review, largely because of 

limited information systems capabilities. 

As discussed earlier, UI claimants may access federally-funded 

reemployment assistance from the Wagner-Peyser Employment Service, 

WIA Adult or Dislocated Worker programs, and, if they are laid off 

because of trade, TAA. To monitor the performance of these programs, 

 17Reemployment Services Grants, provided to ensure that UI claimants would receive 

necessary services to become reemployed, were provided to states annually from 2001 

through 2005. No appropriation was made for these grants in fiscal year 2006, and no

further appropriation has been requested for fiscal year 2007. 

Page 19 GAO-06-484T 
Labor does require states to meet a number of reporting requirements, but 

these reports are submitted on a program-by-program basis, and none of

these reports provide a complete picture of the services received or the 

outcomes obtained by all UI claimants. 

Reporting requirements for the Wagner-Peyser funded Employment 

Service are similarly limited. States are required to provide quarterly 

reports that include summary information on the numbers of Employment

Service participants who received specified services, or who obtained 

particular outcomes, and breaks out this information by several 

demographic categories, and whether or not the participant was a UI 

claimant. However, these reports only contain information on individuals 

who are registered with the Employment Service, and although anyone 

who receives services funded by Wagner-Peyser must be registered with 

the Employment Service, not all UI claimants receive Wagner-Peyser 

funded services. 

WIA and TAA reporting requirements also do not provide a complete 

picture of claimant services and outcomes. Although WIA tracks several 

performance measures directly related to outcomes for Adults and 

Dislocated Workers, including job placement, job retention, and wage gain 

or wage replacement, these records do not contain information for UI 

claimants who are not registered under WIA. Furthermore, many 

individuals served under WIA—particularly those who receive only selfdirected services—are not registered or tracked for performance and are, 

therefore, not reflected in any of the WIA data. Similarly, for the TAA 

program, Labor requires states to submit participant data files on all who 

exit the program each quarter, but the reports are limited to those 

claimants served by TAA.

Having data that show the degree to which reemployment services are 

reaching UI claimants is key to good program management and provides a 

first step toward understanding the impact of these programs. However, 

knowing how many claimants may be accessing reemployment services 

and the type of outcomes they may be achieving has proven difficult for 

state and local officials. 

We found that only 14 states go beyond the federal reporting requirements 

to routinely track the extent to which claimants receive services from the 

broad array of federally funded programs that are designed to assist them. 

Of the remaining 36 states that do not routinely track claimant services, 4 

told us it would not be possible for them to do so. In addition, 37 states 

reported that tracking UI claimants who receive reemployment services 

Page 20 GAO-06-484T 
was somewhat or very difficult, while only 6 states said it was not at all 

difficult. States most often told us that tracking claimant services across 

multiple programs was made difficult by the fact that reemployment 

services and UI claimant data were maintained in separate data systems—

systems that were either incompatible or difficult to link. 

While relatively few states routinely track claimants’ services, even fewer 

track outcomes. Only 6 states go beyond the federal reporting 

requirements to routinely monitor any outcomes for UI claimants who 

receive reemployment services—outcomes such as reemployment rate,

average benefit duration, and UI exhaustion rate. Eleven states reported 

that it would not be possible to calculate any of the outcomes for these 

claimants. The issues states cited in tracking outcomes across programs 

for UI claimants were similar to those for tracking use of services. 

Officials from 35 states told us that tracking one or more outcome 

measures was made difficult by the fact that reemployment services and

UI claimant data were maintained in different systems that were either 

incompatible or difficult to link. 

Labor has some initiatives that may begin to shed light on claimant 

services and outcomes, including modifying its performance measures to 

require states to track a reemployment rate for their UI claimants—

defined as the percentage of UI claimants who are reemployed within the 

quarter following their first UI payment. Labor is also developing a system

to consolidate reporting on performance for Labor’s Employment and 

Training Administration (ETA) programs. This system—ETA’s 

Management Information and Longitudinal Evaluation (EMILE) system—

would consolidate performance reporting across a range of Labor 

programs including WIA, Employment Service, and TAA. Current plans do

not include incorporating UI reporting into EMILE. 

Last year, we recommended that the Department of Labor work with 

states to consider the feasibility of collecting more comprehensive 

information on UI claimants’ services and outcomes. Although Labor 

generally agreed with our findings, Labor commented that current and 

planned data collection efforts would provide sufficient information to 

policy makers. While Labor’s new initiatives, in combination with current 

reporting requirements, will provide valuable information on the 

reemployment activities of some UI claimants, these efforts will not allow 

for a comprehensive, nationwide understanding of claimants’ participation 

in the broad range of reemployment services designed to assist them. 

Furthermore, these efforts will not move states in the direction of having 

the data they need to better manage their systems. 

Page 21 GAO-06-484T 
Mr. Chairman, this completes my prepared statement. I would be happy to

respond to any questions you or other members of the subcommittee may 

have at this time. 

For information regarding this testimony, please contact Sigurd R. Nilsen, 

Director, Education, Workforce, and Income Security, at (202) 512- 7215. 

Individuals who made key contributions to this testimony include Brett 

Fallavollita, Dianne Blank, Janice Peterson and Regina Santucci. 

GAO Contacts and 

Staff 

Acknowledgments 

Page 22 GAO-06-484T 
Page 23 GAO-06-484T 

Related GAO Products 

Unemployment Insurance: Factors Associated with Benefit Receipt. 

GAO-06-341. Washington, D.C.: March 7, 2006. 

Trade Adjustment Assistance: Most Workers in Five Layoffs Received 

Services, but Better Outreach Needed on New Benefits. GAO-06-43. 

Washington, D.C.: January 31, 2006. 

Workforce Investment Act: Labor and States Have Taken Actions to 

Improve Data Quality, but Additional Steps Are Needed. GAO-06-82. 

Washington, D.C.: November 14, 2005. 

Unemployment Insurance: Better Data Needed to Assess Reemployment 

Services to Claimants. GAO-05-413. Washington, D.C.: June 24, 2005. 

Unemployment Insurance: Information on Benefit Receipt. GAO-05-291. 

Washington, D.C.: March 17, 2005. 

Trade Adjustment Assistance: Reforms Have Accelerated Training 

Enrollment, but Implementation Challenges Remain. GAO-04-1012. 

Washington, D.C.: September 22, 2004. 

Workforce Investment Act: States and Local Areas Have Developed 

Strategies to Assess Performance, but Labor Could Do More to Help. 

GAO-04-657. Washington, D.C.: June 1, 2004. 

Workforce Training: Almost Half of States Fund Employment Placement 

and Training through Employer Taxes and Most Coordinate with 

Federally Funded Programs. GAO-04-282. Washington, D.C.: February 13,

2004 

Workforce Investment Act: One-Stop Centers Implemented Strategies to 

Strengthen Services and Partnerships, but More Research and 

Information Sharing Is Needed. GAO-03-725. Washington D.C.: June 18, 

2003. 

Multiple Employment and Training Programs: Funding and 

Performance Measures for Major Programs. GAO-03-589. Washington, 

D.C.: April 18, 2003 

Unemployment Insurance: Role as Safety Net for Low-Wage Workers Is 

Limited. GAO-01-181. Washington, D.C.: December 29, 2000. 

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