Contract No.: N-7731-9-00-87-30 

MPR Reference No.: 8641-440

What Can We Expect 

Under Personal 

Reemployment Accounts? 

Predictions and 

Procedures 

January 23, 2004 

Paul T. Decker 

Irma L. Perez-Johnson 

Submitted to: 

U.S. Department of Labor 

Employment and Training Administration 

200 Constitution Ave., NW 

Room N-5637 

Washington, DC 20210 

Project Officer: 

Janet Javar 

Submitted by: 

Mathematica Policy Research, Inc. 

P.O. Box 2393 

Princeton, NJ 08543-2393 

Telephone: (609) 799-3535 

Facsimile: (609) 799-0005 

Project Director: 

Paul Decker 

 iii 

CONTENTS 

Chapter Page 

 I. INTRODUCTION.......................................................................................................... 1 

 II. PREDICTED IMPACTS OF PRA REEMPLOYMENT BONUSES............................ 5 

A. PREDICTED BONUS RECEIPT RATES ............................................................. 5 

B. PREDICTED IMPACTS ON UI RECEIPT ........................................................... 9 

C. ENTRY EFFECTS................................................................................................ 10 

 III. ISSUES ASSOCIATED WITH MAKING PRA OFFERS ......................................... 11 

A. SETTING THE PRA AMOUNT .......................................................................... 11 

1. What Opportunities Are Offered by Different PRA Amounts?.................... 11 

2. What Is the Trade-Off Between the PRA Amount and the Number of 

Offers That Can Be Made?............................................................................ 13 

3. How Do the Impacts of PRAs on Recipients Vary by the Amount? ............ 17 

B. DEFINING ELIGIBILITY FOR PRAs ................................................................ 18 

1. The State’s Role ............................................................................................ 18 

2. The Role of the Local Area ........................................................................... 19 

 IV. PROCEDURAL ISSUES IN DEVELOPING AND IMPLEMENTING 

 PERSONAL REEMPLOYMENT ACCOUNT PROGRAMS .................................... 25 

A. KEY CHALLENGES IN PRA IMPLEMENTATION......................................... 26 

B. ALLOCATING RESPONSIBILITIES FOR THE PROGRAM........................... 27 

C. IDENTIFYING ELIGIBLE RECIPIENTS AND MAKING PRA OFFERS ....... 29 

1. Identifying and Calling in Eligible Recipients.............................................. 31 

2. Content of the PRA Offers ............................................................................ 34 

3. Conducting PRA Orientations....................................................................... 39 

D. OPERATING PRA PROGRAMS ........................................................................ 40 

1. Processing Bonus Claims .............................................................................. 41 

2. Processing PRA Expenditure Requests......................................................... 45 

3. Managing the Personal Reemployment Accounts ........................................ 50 

E. COLLECTING DATA ON PRA PROGRAMS ................................................... 54 

 v 

TABLES 

Tables Page 

II.1 PREDICTED IMPACTS OF PRA REEMPLOYMENT BONUSES, by PRA amount.... 6 

III.1 IMPLICATIONS OF DIFFERENT PRA AMOUNTS IN AVERAGE STATE, TWO 

YEARS.............................................................................................................................. 14 

III.2 IMPLICATIONS OF DIFFERENT PRA AMOUNTS IN AVERAGE LOCAL AREA, 

TWO YEARS.................................................................................................................... 20

IV.1 PRA PROGRAM FUNCTIONS AND ANALOGOUS ACTIVITIES WITHIN ONESTOP SYSTEMS.............................................................................................................. 28 

 vii 

FIGURES 

Figure Page 

III.1 SAMPLE PROCESS TO SET UP AND ADJUST NUMBER OF PRA OFFERS.......... 22 

IV.1 SAMPLE FLOW OF NEW UI CLAIMANTS THROUGH PRA PROGRAM............... 30 

 ix 

EXHIBITS 

Exhibit Page 

IV.1 WORKFORCE DEVELOPMENT, INC. CUSTOMER RESPONSIBILITY 

AGREEMENT .................................................................................................................. 36 

IV.2 TOOL CHEST LIST OF ‘I WILLS’................................................................................. 38 

IV.3 REQUEST FOR TRAINING FUNDS.............................................................................. 46 

IV.4 REQUEST FOR TRAINING SUPPLIES......................................................................... 47 

1

I. INTRODUCTION 

On January 7, 2003, President Bush unveiled his economic stimulus plan, which included 

the proposed establishment of Personal Reemployment Accounts (PRAs). The PRA proposal 

was subsequently embodied in H.R. 444, the Back to Work Incentive Act introduced in Congress 

on January 29, 2003. The goal of PRAs is to provide unemployed workers who are likely to 

exhaust their unemployment insurance (UI) benefits with additional assistance and incentives to 

help them get back to work sooner. Each account, which would contain up to $3,000, would be 

managed by the unemployed worker who is awarded it. To pay for these accounts, the federal 

government would provide states with a total of $3.6 billion over two years. 

PRAs are designed to offer maximum flexibility to unemployed workers in seeking the 

reemployment services that will best help them prepare for and find a new job. According to 

H.R. 444, PRAs could be used to pay for intensive reemployment services, training, supportive 

services (except for needs-related payments), and assistance to purchase or lease an automobile 

the worker needs to accept a promising job offer. PRA recipients would be able to choose their 

own combination of services and use their PRAs to pay for them. 

As currently formulated, PRAs would differ in two important ways from the standard 

practices of the nation’s workforce investment system. First, PRA recipients who secure 

employment during their first 13 weeks of collecting UI benefits would be eligible for a 

reemployment bonus equal to the balance remaining in the PRA. Such bonuses are not currently 

offered and would be much larger than those tested in any prior demonstrations. Moreover, a 

substantial proportion of the bonus—60 percent—would be paid immediately upon 

reemployment, instead of after some minimum employment retention period. Second, PRAs 

would shift the reemployment assistance that One-Stop career centers offer from a free and 
2

uncapped, but closely managed, benefit to a capped benefit that people manage themselves. 

Since PRA recipients must pay for staff-assisted intensive services and training from their PRAs, 

the PRA award generally represents the maximum total value of assistance that a person could 

receive from the local workforce agency (not including core services).1 In contrast, One-Stop 

centers offer free counseling and other services to qualifying persons, with no explicit caps on 

the dollar value of the assistance they can receive. Furthermore, local staff currently determine 

the appropriateness of particular services for individuals. Given these differences, federal, state, 

and local administrators would face important planning and operational challenges in 

implementing the proposed PRAs offer. 

This paper draws on research from a variety of sources to address issues related to 

implementation of the proposed PRAs. Sources include the UI reemployment bonus 

demonstrations, research on Worker Profiling and Reemployment Services (WPRS) systems, the 

ongoing Individual Training Account (ITA) Experiment, and more general studies of UI 

recipients and unemployed workers. We address three broad questions about PRAs: 

1. What are the likely impacts of the reemployment bonus feature of the PRAs on the 

recipients? 

2. How could states and local areas set the amount and decide who would receive an 

offer? 

3. What procedures could local areas use to offer the PRAs and manage and monitor the 

use of the accounts? 

We deal with these questions in the three major sections this paper comprises. Our objective is 

to provide USDOL, states, and local areas with guidance on options and important 

 1

 PRA recipients would not have to pay for core services available through the One-Stop 

system. These generally include self-access services (for example, job listings) and such 

services as resume writing help and workshops on interviewing to help individuals find 

employment. 
3

considerations in implementing the provisions of the PRA plan. The guidance is based on all 

available information about the proposed PRA programs and our extensive experience in 

implementing procedures for programs similar to the proposed PRA initiative and in conducting 

research on these programs and on unemployed workers. 

5

II. PREDICTED IMPACTS OF PRA REEMPLOYMENT BONUSES 

Experience with the Pennsylvania and Washington reemployment bonus demonstrations 

provides information that can be used to predict the impacts of the reemployment bonus 

component of the proposed PRAs on the receipt of the bonus and UI benefits. In this section, we 

present estimates of these impacts based on combining the findings from the reemployment 

bonus demonstrations and other related research with the details of the proposed PRAs. We also 

show how these estimates vary by PRA amount. 

The potential value of reemployment bonuses available to PRA recipients will depend on 

where states set the PRA amounts. The maximum that states can set is $3,000. In comparison, 

the bonus amounts offered in the reemployment bonus demonstrations, which occurred mostly in 

1989, ranged from about $300 to $1,000. While the proposed PRA maximum appears to be 

substantially more generous than the previously tested bonus amounts, some of this difference 

needs to be discounted as a result of inflation. Still, Table II.1 shows that a $3,000 PRA amount 

in today’s dollars is equivalent to slightly more than $2,000 in 1989 dollars, which is twice as 

large as the most generous bonuses tested in the demonstrations. Alternatively, states can choose 

to set the PRA amount below $3,000. Table II.1 also shows the values of PRA amounts of 

$2,000 and $1,000 when measured in 1989 dollars. 

A. PREDICTED BONUS RECEIPT RATES 

We use two methods to predict reemployment bonus receipt rates among PRA recipients. 

The first uses information on the rates that were observed in the reemployment bonus 

demonstrations, with several adjustments made to account for the details of the PRA proposals 

and for the difference in economic conditions currently and at the time of the demonstrations. 
 6 

TABLE II.1 

PREDICTED IMPACTS OF PRA REEMPLOYMENT BONUSES, 

BY PRA AMOUNT 

 PRA Amount (in Dollars) 

 3,000 2,000 1,000 

Value of PRA Amount in 1989 Dollarsa

 2,040 1,360 680 

Predicted Bonus Receipt Rates (Percent) 

Method 1b

 33 27 20 

Method 2c

 31 30 29 

Predicted UI Impactsd (in Weeks) –1.66 –1.38 –1.09 

a

Based on consumer price index (CPI), 1989 to 2003. 

b

Simulation based on experience with bonus receipt rates in the reemployment bonus 

demonstrations. 

c

Simulation based on reemployment behavior among UI recipients targeted for Worker Profiling 

and Reemployment Services combined with estimated impacts on reemployment rates in the 

bonus demonstrations. 

d

Based on estimated UI impacts in the bonus demonstrations. 
7

The second uses information on reemployment rates among UI recipients targeted for WPRS, 

with adjustments to account for the likely impacts of the bonus offer on reemployment rates 

based on the impacts observed in the bonus demonstrations.2

We predict that the maximum PRA amount of $3,000 would generate substantially higher 

reemployment bonus receipt rates—at least for the first installment of the bonus—than those 

observed in the bonus demonstrations, where the rates ranged from about 11 percent to 22 

percent.3

 We estimate that about 32 percent of those offered a $3,000 PRA will qualify for and 

receive at least the first installment of a reemployment bonus.4

 As Table II.1 shows, one of the 

methods used to predict bonus receipt rates yields an estimate of 33 percent, while the other 

yields an estimate of 31 percent. 

The higher bonus receipt rate associated with a $3,000 PRA is due not only to the greater 

financial incentive of a higher bonus amount, but also to the requirement that the first installment 

of the bonus (60 percent of the total) be paid immediately upon reemployment. In the bonus 

demonstrations, people who became reemployed quickly enough to be eligible for a bonus also 

needed to remain employed for 16 continuous weeks before they could receive the bonus. Many 

people (more than half) who initially appeared to be eligible based on when they stopped 

receiving UI benefits did not subsequently file a bonus claim. Analysis in Corson et al. (1992) 

shows that many of these recipients would not have been eligible for a bonus, for a variety of 

reasons, including their failure to retain their job long enough. However, some of them would 

 2

These methods and the calculations based on them are explained in greater detail in Appendix A. 

3

These rates are based only on the bonus offers that had a qualification period (the period in which people 

could qualify by becoming reemployed) of 11 or 12 weeks. Offers with shorter qualification periods were tested, 

but they are less relevant for making predictions for PRAs, which would have a 13-week qualification period. 

4

PRA reemployment bonuses are designed to be paid in two installments—60 percent of the remaining PRA at 

the time of enrollment, and the other 40 percent after six months of job retention.
8

have qualified under the proposed PRA rules. For example, in contrast to the demonstrations, 

PRA recipients would receive the first bonus installment immediately after reemployment, and 

so initial eligibility would translate directly into bonus receipt, assuming they apply. The size of 

the offer should encourage nearly everyone who is eligible to receive a bonus to actually apply 

for it. 

Another factor that could affect bonus receipt rates is the targeting of the PRA offers to UI 

recipients with high probabilities of exhausting their UI benefits. Theoretically, targeting of the 

bonus should reduce the receipt rate. Since targeting would direct bonus offers to UI recipients 

with long expected unemployment spells, this approach would be expected to reduce the number 

of people who qualify. However, evidence presented in O’Leary et al. (2003) suggests that 

targeting may not reduce the bonus receipt rate and instead may even increase the rate compared 

with the untargeted bonuses that were tested in the demonstrations. Because of the apparent 

contradiction between the theory and the evidence, and since the PRAs would be targeted more 

narrowly than was tested in O’Leary et al. (2003), we chose for this analysis to assume that 

targeting the PRA offers would not affect the bonus receipt rate, on average. 

The bonus receipt rate will be sensitive to the PRA amount set by the states. Lowering the 

PRA amount will lower the bonus receipt rate, as it lowers the financial incentive for people to 

seek the bonus. According to Table II.1, lowering the PRA amount to $2,000 would reduce the 

bonus receipt rate to between 27 and 30 percent, and lowering it to $1,000 would reduce the rate 

to between 20 and 29 percent. Note that even after lowering the PRA amount to $1,000, which 

in real terms is similar to the amounts offered in the demonstrations, the predicted bonus receipt 

rates are still generally larger that the actual rates in the bonus demonstrations. This is due 

primarily to the requirement that the first reemployment bonus installments be paid immediately 

upon reemployment. 
9

B. PREDICTED IMPACTS ON UI RECEIPT 

Predicted impacts on UI receipt are also somewhat higher than the estimated impacts from 

the bonus demonstrations. In the demonstrations, the estimated UI impacts ranged from –.26 

weeks to –.82 weeks per bonus offeree, according to the amount of the bonus offered.5 In 

contrast, Table II.1 shows that we predict that the reemployment bonus component of the $3,000 

PRA will generate a reduction in UI benefits of 1.66 weeks per PRA recipient. The predicted 

impacts under PRAs are larger than the estimated impacts in the bonus demonstrations because 

(1) the more generous PRA bonus amount should speed reemployment and therefore reduce 

benefits received, and (2) the targeting of the PRA bonus focuses on people who anticipate long 

UI spells, so it should increase the average reduction in UI for those becoming reemployed 

during the bonus qualification period (see O’Leary et al. [2003] for a discussion of this issue). 

Reducing the PRA amount reduces the predicted impact of the bonus offer on UI receipt per 

PRA recipient. When the PRA amount is reduced, the financial incentive for people to become 

reemployed quickly and give up their remaining UI benefits is lowered. Table II.1 shows that 

reducing the PRA amount to $2,000 or $1,000 also reduces the impacts on UI receipt to –1.38 

and –1.09 weeks per recipient, respectively. 

Note, however, that a lower PRA amount will have UI impacts on a larger group of UI 

recipients, since at the lower amount proportionately more UI recipients will receive a PRA 

offer. Therefore, although the UI weeks paid per PRA recipient may be higher at the reduced 

PRA amount (since UI impacts are reduced), the aggregate weeks paid across all UI recipients is 

likely to be lower (since the UI impacts are extended to a larger group of UI recipients). For 

 5

These estimated impacts are based only on the bonus offers that had a qualification period (the period in 

which people could qualify by becoming reemployed) of 11 or 12 weeks. Offers with shorter qualification periods 

were tested, but they are less relevant for making predictions for PRAs, which will have a 13-week qualification 

period. 
10

example, if the PRA amount is reduced from $3,000 to $1,000, the reduction in UI receipt 

declines from –1.66 weeks to –1.09 weeks, but this impact is expanded to three times as many 

recipients. Hence, to compare these impacts, we need to triple the UI reduction for the $1,000 

PRA, which yields a UI impact of –3.27 weeks compared with –1.66 weeks for the $3,000 PRA, 

holding constant the number of PRA recipients. So, in this scenario, the lower PRA amount, at 

least in terms of the reemployment bonus feature of the PRA, is more cost-effective. 

C. ENTRY EFFECTS 

One factor we have not accounted for in our predictions is entry effects, which would occur 

if PRAs, by increasing the potential financial benefits of filing for UI, expand the number of 

people who file. Many people who expect to find a new job quickly choose not to apply for 

benefits (Wandner and Stettner 2000). Others report that applying for benefits is “too much 

work” or “a hassle.” The potentially large financial incentive inherent in a PRA offer could 

induce many of these people to change their behavior and claim benefits. This could increase 

both the bonus receipt rate, since most of these people say they are likely to become reemployed 

quickly, and the overall costs to the UI system, since they would claim and receive some benefits 

rather than forgo them completely. 

However, entry effects are likely to be mitigated because of the low probability that the 

potential new UI entrants would receive a PRA offer. First, as we will discuss in greater detail in 

the next section, PRA offers would be made to a small proportion of the UI population, with the 

exact figure depending on the amount that is set. Furthermore, the offers would be targeted to 

recipients most likely to exhaust their benefits, which may lower further the probability that PRA 

offers would be received by people who expect to start a new job quickly. Given these factors, 

the potential new UI entrants may determine that, despite the increased financial incentive the 

reemployment bonus offers, the probability of receiving a PRA offer is low enough that they are 

still disinclined to file a UI claim. 
 11

III. ISSUES ASSOCIATED WITH MAKING PRA OFFERS 

In determining how PRA offers would be made, states would need to decide the PRA 

amount and who is going to receive the offer. States have the primary responsibility for setting 

the amount, but, as we will point out, they should take into account how the figure they set 

would affect local areas. With respect to eligibility, we argue that both the state and the local 

areas should play a role in determining who receives an offer. 

A. SETTING THE PRA AMOUNT 

The PRA proposal specifies that states would establish the amount of the PRAs to be 

offered, which shall be uniform throughout the state and shall not exceed $3,000. In setting the 

amount, states would need to consider at least three questions: 

1. What opportunities are offered by different PRA amounts? 

2. What is the trade-off between the PRA amount and the number of offers that can be 

made? 

3. How do the impacts of the PRAs on recipients vary by the amount? 

1. What Opportunities Are Offered by Different PRA Amounts? 

The PRA amount establishes an overall constraint on the resources available to recipients. 

In setting the amount, states face a tension between the bonus and service components of the 

account. If the amount of the PRA is set high so as to maximize the services it can purchase, that 

also creates a generous potential reemployment bonus. 

The perceived adequacy of different PRA amounts depends on whether the perception is 

based on the bonus or the service component of the PRA. For example, setting the PRA amount 

to the $3,000 maximum would offer a generous reemployment bonus. As we point out in the 

previous section, a bonus offer of $3,000 in today’s dollars is slightly more than twice as large as 
 12

the most generous bonuses tested in the Washington and Pennsylvania reemployment bonus 

demonstrations in the late 1980s. 

However, as a maximum amount to pay for training or intensive reemployment services and 

support, $3,000 may be limiting. One way to see this is to compare a $3,000 PRA with the 

amount that WIA local areas currently make available through Individual Training Accounts 

(ITAs) to pay for training. D’Amico et al. (2002) report that among 26 local areas they recently 

observed offering ITAs, only 5 limited ITAs to $3,000 or less. Furthermore, the ITA amount 

offered in these local areas needs only to cover the costs of training; the costs of other 

reemployment services, such as career counseling, are currently paid for by local agencies. In 

contrast, the PRA amount needs to cover the costs of other reemployment services and support in 

addition to training. Therefore, at least in some areas, $3,000 would not appear to represent 

generous funding for training, services, and other support. 

The adequacy of the amount a state sets for its PRA could also vary by local area. First, 

training opportunities and costs vary by local area, so a given PRA amount would purchase 

different levels of support in different areas. For example, a local area with a community college 

may have more low-cost training options than one served only by private providers. Second, the 

cost of living varies by local area, so the real value of the PRA amount as a reemployment bonus 

would also vary (just as the real value of a given UI weekly benefit amount varies). Third, the 

maximum amount of the primary alternative source of training support for many potential PRA 

recipients—the ITA—also varies by local area. For example, D’Amico et al. (2002) indicate that 

in Missouri the ITA amount is $5,000 in St. Louis County, compared with $1,700 in West 

Central Missouri. Therefore, a PRA amount of $2,000 might be perceived as generous in West 

Central Missouri but not in St. Louis County. This is especially important, since everyone who 

accepts the offer of a PRA must forgo access to an ITA or other WIA services. Presumably, 
 13

people who are interested in services would be more likely to accept PRA offers that are high 

relative to the local ITA amounts. States would want to be aware of how this comparison plays 

out in different local areas. 

2. What Is the Trade-Off Between the PRA Amount and the Number of Offers That Can 

Be Made? 

Using data drawn from the ITA Experiment, we have conducted analyses which suggest that 

PRA recipients would generally spend most of their PRAs.6 Therefore, when states set the PRA 

amount, they are also implicitly determining the average expenditures for PRA recipients and the 

number of people that would be served. That is, setting the amount closely determines how the 

available resources would be spread across potential recipients in the state. States can choose to 

offer either generous PRAs to fewer recipients or smaller PRAs to a larger number. 

If all PRA recipients were to exhaust their PRAs, calculating the number of offers that can 

be made given the PRA amount is very straightforward—simply divide the available total 

resources by the PRA amount. Since we expect most recipients to use most of their PRA, this 

calculation is probably a reasonable starting point. In Table III.1 we illustrate this calculation for 

the average state, based on the state receiving an average portion of the $3.6 billion available 

nationwide for PRAs.7

 As shown in the table, the average state would have a minimum of $63 

million that could be distributed to local areas to be offered through PRAs over two years.8

 If we 

assume that all PRA recipients exhaust their accounts, average expenditures per recipient are 

 6

The research paper (Perez-Johnson and Decker 2003) containing this data analysis is attached as Appendix B. 

7

The estimates in Table III.1 are based on simulations shown in Appendix C. These simulations can be revised 

to match the particular circumstances of a given state.

8

This is calculated by dividing the $3.6 billion by 53 states (including DC, the U.S. Virgin Islands, and Puerto 

Rico) to get the state share, and then subtracting off the maximum 7 percent of funds that are available to pay for 

PRA administration, including revising the profiling model and setting up a database to manage the PRAs. 
 14 

TABLE III.1 

IMPLICATIONS OF DIFFERENT PRA AMOUNTS 

IN AVERAGE STATE, TWO YEARS 

 PRA Amount (in Dollars) 

 3,000 2,000 1,000 

Total Resources Available for PRAs 

(in Dollars)a

 63,169,811 63,169,811 63,169,811 

Assuming All Recipients Exhaust PRAs: 

Average expenditures per PRA recipient 

 (in dollars) 3,000 2,000 1,000 

Number of offers madeb

 21,057 31,585 63,170 

Percent of UI recipients receiving an offerc

 5.4 8.0 16.1 

Assuming Not All Recipients Exhaust PRAs: 

Average expenditures per PRA recipient 

 (in dollars)d

 2,519 1,672 831 

Number of offers madeb

 25,077 37,783 76,017 

Percent of UI recipients receiving an offerc 6.4 9.6 19.4 

a

Based on $3.6 billion divided among 53 states, minus 7 percent that may be used to revise the 

profiling model or create a tracking database. 

b

Total resources available divided by average expenditures. 

c

Based on 20.8 million new UI recipients nationwide over 2 years, divided by 53 states. 

d

Based on the following assumptions: 

1. The number of PRA recipients who receive the first installment of the reemployment bonus 

is based on the average of the rates shown in Table II.1 

2. 81 percent of first-installment recipients also receive the second installment 

3. Reemployment bonus recipients who do not receive the second installment do not spend 

the remainder of their PRA on training or other services 

4. PRA recipients who do not receive a reemployment bonus spend, on average, 80 percent of 

their PRA on training and other services 
15

equal simply to the PRA amount, as shown in the second line of the table. The next line shows, 

for different PRA amounts, how many offers would be made if all PRA recipients were expected 

to exhaust their accounts. If the PRA is set at $3,000, PRAs could be offered to an estimated 

21,057 UI recipients over the two years. This is comparable to 5.4 percent of the UI population 

in the average state, which amounts to slightly less than half the 12 percent of the UI population 

that is currently targeted for WPRS services.9

States could vary the number of PRAs they offer by adjusting the PRA amount. For 

example, Table III.1 shows that if all recipients were to exhaust their PRAs and the PRA amount 

is lowered to $2,000, the number of offers that the state could make increases to 31,585, or 8.0 

percent of the state UI population. If the amount is lowered even further, to $1,000, the state 

could increase the number of offers to 63,170, which represents 16.1 percent of the UI 

population. In this case, the number of PRA offers would exceed the WPRS population, which 

could create procedural problems for local areas.10

Inevitably, not all PRA recipients would exhaust their full PRAs. There are at least two 

reasons for this: (1) not all PRA recipients who become reemployed and receive a first bonus 

installment from their account would stay employed long enough to receive the second 

installment, and (2) PRA recipients who fail to qualify for a bonus might not completely exhaust 

their PRA on training and services. PRA resources that are offered but not spent could then be 

made available to new PRA recipients. 

In determining how many UI recipients would be served through PRAs, states should 

recognize that not all recipients would exhaust their accounts. To determine how a given amount 

 9

The Economic Report of the President, 2003, reports that 1.2 million, or 12 percent, of UI recipients 

nationwide were referred to WPRS from July 2001 through June 2002. 

10See Section III for further discussion of procedural issues associated with PRAs.
16

translates into offers, states would have to make some assumptions about how recipients would 

use their PRA resources. Using a set of assumptions that are explained in Table III.1, we 

generated simulations of how many offers the average state can make for given amounts with 

their PRA funding.11 The last three lines of Table III.1 show the estimates generated by the 

simulations. 

Accounting for the fact that not all recipients would exhaust their PRAs obviously increases 

the number of PRA offers the state would make. According to our simulations, if the state sets 

the PRA amount to $3,000, actual expenditures would average $2,519 rather than the awarded 

$3,000. With that level of expenditures, the number of PRA offers that could be made goes up to 

25,077, or about 4,000 more than if all recipients exhaust their PRAs. This represents 6.4 

percent of all UI recipients, or slightly more than half of WPRS-targeted UI recipients. If the 

PRA amount is lowered to $2,000 or $1,000, the number of offers that could be made rises to 

37,783 and 76,017, respectively. These figures represent 9.6 percent and 19.4 percent of the UI 

recipient population, respectively. 

The simulations presented here imply that most states would likely spend all their PRA 

resources regardless of the PRA amount. If the amount is set at $3,000, the average state is 

likely to spend all its resources by making offers to only 6.4 percent of the UI population. Even 

if the amount is set at only $1,000, the average state could expect to exhaust its funding by 

making offers to 19.4 percent of the UI population (although this implies that offers would have 

to extend beyond the current WPRS population). If, after the initial offers are made, recipients 

spend less of their PRAs than expected, states should be able to expand the offers to a somewhat 

 11Additional details of the simulations are shown in Appendix C. 
17

larger proportion of the UI population to ensure their funds are spent. Later in this paper, we 

describe one way in which this process might work. 

3. How Do the Impacts of PRAs on Recipients Vary by the Amount? 

Different PRA amounts could generate different impacts on recipients both by changing the 

incentives for reemployment and by changing the resources available to support training and 

related services. Higher PRA amounts would increase the financial incentive provided by the 

reemployment bonus, which is likely to increase the rate at which PRA recipients seek and 

receive the bonus. Therefore, setting the PRA at the maximum amount of $3,000 should also 

maximize the bonus take-up rate, as recipients would put the greatest effort into reemployment to 

qualify for the bonus. 

A high bonus take-up rate would also imply that a high proportion of total PRA dollars are 

spent on the bonus as opposed to training or other services. So, although setting the PRA at 

$3,000 would offer the greatest access to training and services, this approach also encourages 

more recipients to focus on the reemployment bonus aspect of the accounts. 

Setting higher PRA amounts should also generate larger impacts on employment and UI 

receipt per PRA recipient. As we noted earlier, a $3,000 PRA should maximize the impact on 

employment and the reduction in UI receipt per PRA recipient, since this is the amount that 

maximizes both the reemployment incentive and the available training and service support for 

each recipient. However, if the amount is set lower, PRAs could be offered to a larger group of 

people, potentially affecting employment and UI receipt among this larger group. So it is 

difficult to predict whether setting the PRA at $3,000 would maximize the impact on 

employment and UI receipt among all UI recipients.
18

B. DEFINING ELIGIBILITY FOR PRAs 

We expect that both states and local areas would play a role in determining which customers 

are eligible for PRAs. In this section we describe issues related to the responsibilities of states 

and local areas, and we provide one scenario for how these responsibilities might be split 

between the two entities. 

1. The State’s Role 

Under the PRA proposal, each local area would get an allotment of PRA dollars based on 

the number unemployed locally. However, as described in the previous section, the amount of 

the PRA offer has already been set by the state. By setting the PRA amount, states have already 

determined to a large extent how many people statewide would be served through PRAs. 

However, the number that could be served in any local area would vary according to how the 

money allotted to that area (which would be based on local unemployment numbers) compares 

with the fixed PRA amount to be offered. If the number unemployed in each local area is closely 

correlated with the number starting to receive UI benefits, then each area should be able, using 

the PRAs, to serve a roughly comparable proportion of its UI population. As we pointed out 

earlier, this proportion would be dictated by the amount of the PRA. 

Having set the PRA amount and the allotment for each local area, a state could also set the 

specific eligibility criteria for PRA offers. The state might, based on the projected proportion of 

the UI population to be served, set a specific exhaustion probability threshold. That is, the state 

could require that any UI recipient with a benefit exhaustion probability above X percent be 

offered a PRA. A drawback of this approach is that exhaustion probabilities may vary across 

local areas, so a given probability threshold would risk exhausting local allotments quickly in 

some areas and simultaneously underutilizing the allotments in others. 
19

2. The Role of the Local Area 

An alternative approach, which is analogous to what some states have done to target WPRS 

services, would be to allow the local areas to decide how many PRAs to offer each week, based 

on their PRA allotment and the offer amount set by the state. The PRA allotment and PRA 

amount essentially dictate the number of offers a local area could make per week. Once local 

areas determine how many offers to make in a week, those offers would need to be targeted to 

the UI recipients with the highest benefit exhaustion probabilities in that week. Several states 

used a similar approach to target UI recipients for reemployment services under WPRS (see, for 

example, the discussion of WPRS targeting in Maryland and Oregon in Dickinson et al. [1999]). 

Under this approach, states allowed each local area to determine its service capacity and then 

offer services to those local recipients with the highest probabilities of benefit exhaustion until 

that capacity was filled. 

Local areas could use their own assumptions to simulate the number of PRA offers to make. 

For example, Table III.2 uses the same assumptions used for the state simulations above to 

illustrate how a local area might go about determining how many offers to make to new UI 

recipients each week.12 One approach is shown in the first column, where the local area would 

simply divide the local two-year allotment by $3,000 to determine the number of PRA offers to 

make over the two years, and divide that number by 104 to determine the number of offers to 

make in each week. For the case shown in Table III.2, this simple approach implies that the 

local area would offer $3,000 PRAs to 1,888 people for the two years, or 18 each week. 

However, by accounting for the fact that some PRA recipients would not exhaust their 

accounts, the local area could increase the total number of $3,000 PRA offers from 1,888 to 

 12Additional details are shown in Appendix C. 
 20 

TABLE III.2 

IMPLICATIONS OF DIFFERENT PRA AMOUNTS 

IN AVERAGE LOCAL AREA, TWO YEARS 

 PRA Amount (in Dollars) 

 3,000 2,000 1,000 

Total Resources Available for PRAs 

(in Dollars)a

 5,664,975 5,664,975 5,664,975 

Assuming All Recipients Exhaust PRAs: 

Average expenditures per PRA recipient 

 (in dollars) 3,000 2,000 1,000 

Number of offers madeb

 1,888 2,832 5,665 

Offers per weekc

 18 27 54 

Percent of UI recipients receiving an offerd

 5.4 8.0 16.1 

Assuming Not All Recipients Exhaust PRAs: 

Average expenditures per PRA recipient 

 (in dollars)e

 2,519 1,672 831 

Number of offers madeb 2,249 3,388 6,817 

Offers per weekc

 22 33 66 

Percent of UI recipients receiving an offerd 6.4 9.6 19.4 

a

Based on $3.6 billion divided among 591 local areas across 53 states, minus 7 percent that may 

be used to revise the profiling model or create a tracking database. 

b

Total resources available divided by average expenditures. 

c

Number of offers made over the 2 years divided by 104. 

d

Based on 20.8 million new UI recipients nationwide over 2 years, divided by 591 local areas. 

e

Based on the following assumptions: 

1. The number of PRA recipients who receive the first installment of the reemployment 

bonus is based on the average of the rates shown in Table II.1 

2. 81 percent of first-installment recipients also receive the second installment 

3. Reemployment bonus recipients who do not receive the second installment do not spend 

the remainder of their PRA on training or other services 

4. PRA recipients who do not receive a reemployment bonus spend, on average, 80 percent 

of their PRA on training and other services 
21

2,249, or 22 per week, as shown in Table III.2. Reducing the PRA amount would also increase 

the number of PRA offers that can be made. The bottom panel of Table III.2 shows that if the 

PRA amount is reduced to $2,000, the number of offers increases to 3,388 over two years, or 33 

offers per week. Reducing the amount to $1,000 increases the total offers to 6,817, or 66 per 

week. 

Using this approach to determine the numbers of weekly offers to make would exhaust the 

local area’s PRA allotment in two years, under the assumptions and projections built into our 

calculations. However, even if our assumptions and projections are reasonable, actual 

experience is likely to be different, and local areas would have to make adjustments over time. 

One way to adjust would be to recalculate periodically the projections shown in Table III.2 based 

on actual experience with PRA expenditures, and to change the number of offers as necessary to 

use up the local allotment. Since a key parameter in Table III.2 is the bonus receipt rate, the 

local areas would begin having information to adjust their offers within 13 weeks or so of their 

initial PRA offers. For example, if a local area finds that a lower-than-expected number of early 

PRA recipients become reemployed quickly enough to receive a first bonus installment, 

somewhat lower projected expenditures per recipient would result. The local area could respond 

to this trend by increasing the number of PRA offers to be made over the rest of the year. This 

would ensure that the local area fully utilizes the available PRA resources. Figure III.1 shows 

how a local area would adjust its PRA offers on a quarterly basis to use their PRA funding fully. 

UI recipients whose exhaustion probabilities are too low for them to receive an offer in their 

first week of UI benefits could be put onto a waiting list for a limited period. For example, if a 

local area offers PRAs to UI recipients with the 20 highest exhaustion probabilities, the rest of 

the UI recipients could be put onto a waiting list for the next two weeks. UI recipients in this 

group could receive a PRA offer in the following two weeks if their exhaustion probability falls 
22

Local area receives PRA

allocation for the year

Divide by

number of quarters left

in the year

PRA budget for the quarter

Divide by

estimated average PRA

expenditure

Number of PRA offers

to make in the quarter

Recover

unused PRA funds and

add to remaining budget

for year

FIGURE III.1

SAMPLE PROCESS TO SET UP AND ADJUST

NUMBER OF PRA OFFERS
23

in the top 20 during that time. A similar waiting-list approach is popular in targeting UI 

recipients for WPRS. Presumably, any UI recipients on the waiting list for a PRA offer would,in 

the interim, be eligible to receive other WIA services if they were determined eligible. If they 

register for WIA, they would likely be considered ineligible for any subsequent PRA offer. The 

following section provides further discussion of local procedural issues of this type. 

25

Design and Operational Decisions 

Regarding PRA Programs 

• How will PRA responsibilities be 

allocated? 

• Who will receive PRA offers? 

• How will PRA offers be made? 

• What is the content of PRA offers? 

• How will bonus claims be processed? 

• What will be allowable uses of PRA 

funds? 

• How will PRA expenditure requests be 

processed? 

• How will PRA recipients appeal denials 

of bonus and expenditure requests? 

• How will payments from PRAs be 

made? 

• How will PRA balances be tracked? 

• What implementation and outcomes 

data will be collected? 

IV. PROCEDURAL ISSUES IN DEVELOPING AND IMPLEMENTING 

PERSONAL REEMPLOYMENT ACCOUNT PROGRAMS 

Workforce administrators would have to consider a variety of issues as they design and 

implement their PRA programs. The text box below shows the range of operational decisions 

they would face. In this chapter, we discuss issues, options, and resources that states and 

localities would consider as they make such 

decisions. 

Our discussion is based on process research 

findings on the implementation of the reemployment 

bonus demonstrations, Worker Profiling and 

Reemployment Services (WPRS) systems, and 

Individual Training Accounts (ITAs) and other 

components of Workforce Investment Act (WIA) 

programs. This is likely to be highly relevant 

information as states and localities set up their PRA 

programs and reflect on the issues they might 

encounter once these programs are in operation. 

Because PRAs would be authorized for only three 

years, there would be considerable pressure to get 

the programs up and running quickly once authorizing legislation is approved. Therefore, we 

would expect workforce administrators to rely as much as possible on the procedures they now 

use to operate similar programs, the procedures and readily available resources from similar 

programs operated by others, or both. 
26

A. KEY CHALLENGES IN PRA IMPLEMENTATION 

Before discussing specific operational decisions, we should highlight several factors that 

would challenge workforce administrators as they design and implement PRA programs: 

• The PRA concept is new. Reemployment bonuses are not currently offered to UI 

recipients, WPRS participants, or other customers of the One-Stop system. At 

present, the use of vouchers (through ITAs) is also limited to WIA participants 

determined to be in need of training. In addition, research conducted to inform the 

design of the ITA Experiment found that, on their own, local areas tend to restrict 

customers’ decision making and use of ITA resources in important ways (PerezJohnson et al. 1998). Yet PRAs would extend the application of vouchers to the full 

range of assistance offered by One-Stop centers, not just training, and give customers 

much greater flexibility and control over the use of resources.

• PRA programs could be complex. Because PRAs combine a reemployment bonus 

and a broad service voucher component, the programs would likely involve several 

steps and, as we discuss next, a variety of state and local actors. States and localities 

must also ensure that bonuses are awarded to the right people and that PRA funds are 

used appropriately. Combined, these factors could drive workforce administrators to 

specify their PRA programs fully and try their best to anticipate opportunities for 

fraud and misuse of PRA funds. Thus the PRA programs could become fairly 

complex.

• Yet states and localities would need to implement PRAs quickly, using simple 

procedures. As we noted, draft legislation authorizes the proposed PRA programs for 

only three years. Both the temporary nature of PRA programs and their short 

implementation timetable should push workforce administrators to keep PRA 

procedures simple. In addition, the program’s overall objective is to provide 

unemployed persons with strong, clear incentives to become reemployed quickly, and 

with direct control and flexibility in the use of resources for employment-related 

needs. To accomplish this, PRA programs should also use procedures that are 

straightforward and easy to understand.

• Relevant experience and awareness of resources to support PRA implementation 

are likely to be uneven. Experience operating reemployment bonus programs is 

limited to a few states (demonstrations were conducted only in Illinois, New Jersey, 

Pennsylvania, and Washington). Similarly, states and localities vary in their overall 

emphasis on WIA-funded training and, therefore, in their use of and experience with 

ITA training vouchers (CLASP 2003; and D’Amico 2002). This would make it 

important for workforce administrators to have access to guidance and information on 

resources as PRA programs are implemented. 
27

B. ALLOCATING RESPONSIBILITIES FOR THE PROGRAM 

Among the first decisions that workforce administrators would need to make is how to 

allocate responsibility for the PRA program overall and for the many individual functions 

involved in operating the programs. State-level officials and workforce administrators would 

also have to decide how narrowly to define the parameters for implementation of PRA programs 

and which operational decisions to leave to the discretion of local areas. 

Most PRA program functions resemble current One-Stop activities. Table IV.1 matches 

PRA program functions to similar One-Stop activities. As it shows, while the range of functions 

to be performed is wide and all these functions would be new, most PRA activities—with the 

exception of processing and paying reemployment bonuses—are similar to activities currently 

being conducted within the One-Stop system. Therefore, some expertise and resources should be 

available to build upon for PRA implementation. 

Dividing PRA responsibilities across UI, ES, and WIA staff might be desirable. As Table 

IV.1 also shows, PRA-like activities are sometimes conducted by UI, ES, and WIA staff. 

Allocating PRA responsibilities in a manner that reflects and builds upon the current 

responsibilities of staff from these three programs may be the most practical and efficient way to 

capitalize on the resources and expertise of these various One-Stop partners. 

Some PRA activities might still require shared responsibility. A key example of this is the 

management of the accounts. PRA recipients would be able to use account funds to purchase 

counseling and other reemployment assistance, which are local services likely to be delivered by 

WIA staff (Table IV.1). PRA recipients would also be eligible for reemployment bonuses, and, 

under the bonus demonstrations, eligibility verification and payment of bonuses were conducted 

as statewide processes by UI staff. Yet the funds to pay bonuses or pay for services would all 
28

TABLE IV.1 

PRA PROGRAM FUNCTIONS AND ANALOGOUS ACTIVITIES 

WITHIN ONE-STOP SYSTEMS 

PRA Program Function 

Equivalent Within 

One-Stop System 

Agency/Program 

Responsible 

Staff Responsible 

(State vs. Local) 

Identify eligible UI recipients - Identify WPRS clients UI State 

Call in eligible UI recipients - Call-in WPRS clients UI/ES Varies (State, local) 

Make PRA offers - WPRS orientations 

- WIA orientations 

UI/ES, some WIA 

WIA 

Local 

Local 

Provide services to PRA clients 

and answer client questions 

- WPRS services 

- WIA services 

Varies (ES, WIA) 

WIA 

Local 

Local 

Review and approve bonus 

claims 

- None currently but done under 

bonus demonstrations UI* State* 

Review and approve PRA 

expenditure requests 

- Review and approve ITA 

expenditure requests WIA Local 

Handle appeals of rejected 

bonus claims and expenditure 

requests 

- Appeals of ITA program 

approval decisions and 

expenditure requests WIA Local 

Process payments, including 

bonuses, out of PRAs and 

track account balances 

- Bonuses are not offered 

currently but were paid under 

demonstrations 

- Process payments out of ITAs 

and track account balances 

UI* 

WIA 

State* 

Local 

Follow up on PRA recipients 

who exhaust their UI benefits - Follow up on WIA clients WIA Local 

Note: * = Agency or staff responsible for these functions during the reemployment bonus demonstrations. 

come out of the same account, and expenditures on services would not necessarily preclude 

bonus payouts and vice versa. This would make it difficult to implement programs where 

account management is divided—concurrently or sequentially—between UI staff at the state 

level and WIA staff at the local level.

PRA implementation would require greater information sharing and coordination among 

UI, ES, and WIA staff. Because the One-Stop system is still fairly new and evolving, 
29

coordination among UI, ES, and WIA staff is not always as close as may be desired. For 

instance, in most states and localities, WPRS responsibilities are divided between UI and ES 

staff (Table IV.1). When WIA staff participate in WPRS orientations, it is usually to describe 

WIA-funded training assistance. While WPRS clients are referred to the WIA program for 

reemployment assistance in some localities, it is more common for the WIA and WPRS 

programs to operate as distinct entities—with different target populations and service offerings. 

Yet PRA programs would combine activities and services from all three programs, so 

implementing them would require greater coordination and information sharing across these key 

One-Stop partners and could accelerate efforts to integrate One-Stop services. 

We expect states to provide broad guidelines and allow local areas flexibility in the 

operation of PRA programs. Consistent with how WIA and other One-Stop programs 

commonly operate, we anticipate that states would make decisions about the program parameters 

that have been left to their discretion in the legislation (for example, the uniform amount to be 

offered to PRA-eligible recipients statewide) or as state options (for example, whether to extend 

eligibility to optional groups or whether to specify additional criteria for eligibility or priority). 

To safeguard against misuse of PRA funds, states might also define allowable uses of the PRAs, 

standards for determining the appropriateness of a requested expense, and standards for 

determining bonus eligibility beyond those specified in the legislation. 

C. IDENTIFYING ELIGIBLE RECIPIENTS AND MAKING PRA OFFERS 

 Once responsibilities for key PRA functions and the program overall have been allocated, 

workforce administrators would need to tackle basic decisions about how their PRA programs 

should operate. The first steps in program operations would be to identify eligible UI recipients 

and offer PRAs to them (Figure IV.1). In addition to deciding the number of PRA offers to make 
30

Call in eligible UI recipient to PRA

orientation

Does

individual

show?

Make PRA offer

Is full-time

employment secured within

13 weeks of UI benefit

receipt?

Individual forfeits

PRA eligibility

Is offer

accepted?

Establish PRA

Does individual

request PRA expenditures within

12 months of account

establishment?

Pay out first bonus installment Review service or expense request

Is request

allowable? Are there

sufficient funds left over in

account?

Deny

request

Is

individual still employed

6 months later?

Did individual

lose employment because of

"lack of work"?

Pay out second

bonus installment

Individual forfeits further

PRA eligibility

Charge account for requested

service, pay for expense directly,

or reimburse recipient for expense

OR

FIGURE IV.1

SAMPLE FLOW OF NEW UI CLAIMANTS

THROUGH PRA PROGRAM

NO

YES

NO

YES

NO

YES

NO

YES

YES

NO

NO

YES

NO

YES

Is the claimant

PRA-eligible?

Refer to regular

WPRS services

Screen WPRS-eligible claimants for

PRA eligibililty

YES

NO
31

initially and how to adjust these procedures over time (discussed in Chapter III), workforce 

administrators would need to define the content of the offers and develop procedures for making 

them. In deciding how to make PRA offers, workforce administrators would need to figure out 

how to call in eligible UI recipients and how to conduct PRA orientations. 

1. Identifying and Calling in Eligible Recipients 

“In general, an individual shall be eligible to receive assistance . . . if, at a minimum, beginning after the date of 

enactment of the Back to Work Incentive Act of 2003, the individual (1) is identified as likely to exhaust regular 

unemployment compensation and in need of job search assistance to make a successful transition to new 

employment, (2) is receiving regular unemployment compensation under any State or Federal program administered 

by the State; and (3) is eligible for not less than 20 weeks of benefits. A state may establish additional criteria for 

eligibility and for priority in the provision of assistance.” (H.R. 444 Sec. 135E(b).) 

States’ lists of WPRS eligibles are the likely starting point for PRA call-in procedures. To 

identify and call in PRA-eligible UI recipients, workforce administrators could easily build upon 

the procedures they now use to identify WPRS-eligible persons and call them in for orientations. 

Needels, Corson, and Vannoy (2002) note that the process to identify and call in WPRS-eligibles 

generally involves three steps: (1) weekly computation of a profiling score for persons receiving 

a first UI payment or, in some states, filing an initial claim; (2) the ranking of UI recipients by 

profiling score for each local office; and (3) the selection of recipients to call in and the sending 

of a request that they report for an orientation. The first two steps are usually done in the central 

UI office, while the third is done in the central office in some states and in local offices in others. 

When the call-in step is done centrally, the central office usually generates and mails out call-in 

letters, but local offices determine the number of recipients to be called in. When local areas 

conduct the call-in, they usually review their lists of profiled clients and call in as many 

recipients as site capacity will allow. 

Additional exclusions may nevertheless be needed for PRAs. Draft legislation specifies 

that, to be eligible for PRAs, UI recipients must have qualified for at least 20 weeks of benefits. 
32

States may therefore need to implement additional screens that exclude people who qualify for 

fewer than 20 weeks of benefits, and, since states share lists of profiled recipients with local 

offices, incorporate this information into those lists. Staff charged with calling in PRA-eligibles 

might do as some local staff do currently and not always invite the top X people with the highest 

profiling scores to PRA orientations. Rather, before inviting profiled recipients to PRA 

orientations, staff would want to check that they are still actively collecting UI benefits and have 

remained eligible for the program. In addition, local staff would want to check that recipients are 

not already WIA-registered customers, as this would disqualify them from the PRA program. In 

the second year of the program, it would also be important to check that eligible UI recipients 

have not already received a PRA, which should be a one-time benefit. 

PRA call-in procedures should promote early engagement. Research has found WPRS 

orientation attendance rates to be low and followup with UI recipients who fail to show to be 

limited (Needels, Corson, and Nicholson 2001). States and local areas would nevertheless have 

a limited time period in which to use their PRA allocations, which would make it important to 

identify and engage eligible persons promptly. PRA programs would also want to engage 

eligible recipients early in their unemployment spells so that the reemployment bonus—available 

only through the 13th week of benefit receipt—provides a strong incentive for recipients to 

intensify their job search efforts or consider employment opportunities more broadly. Early 

engagement would also be important for PRA recipients to be able to complete training or other 

services before their UI benefits run out. 

Call-in procedures should also minimize “gaming” opportunities. Research also suggests 

an important reason why some WPRS-eligible recipients fail to attend their orientations: 

although their profiling scores suggest a high probability of UI benefit exhaustion, they still get 

jobs early in their UI spells and exit the program (Needels, Corson, and Vannoy 2002; and 
33

Needels, Corson, and Nicholson 2001). The offer of a reemployment bonus may encourage such 

recipients to remain on the UI rolls longer than they would otherwise. That is, if such recipients 

are called in for a PRA orientation and become aware of the availability of reemployment 

bonuses, they might delay accepting a job offer or their start of employment just so they have an 

opportunity to accept the PRA and claim a reemployment bonus. While it would be difficult to 

eliminate this gaming potential completely, it could be reduced somewhat if PRA eligibility is 

structured as a two-stage process. Recipients could be first called in for regular WPRS services 

and informed of their eligibility for PRAs later, if they have remained unemployed and are still 

collecting UI benefits after a minimum number of weeks. Efforts to limit this gaming potential 

should nevertheless be balanced against the desire to also promote early engagement. 

Some UI recipients might contest their exclusion from PRA programs. While draft 

legislation specifies that PRAs are not an entitlement, UI recipients could still challenge their not 

being offered PRAs if others they know and perceive as similar are offered the benefit. This is 

because PRAs represent an offer without similar alternatives for excluded persons to pursue. 

Unlike WPRS, where people who are not profiled can still register with the ES and request 

reemployment assistance, people who are not determined eligible for PRAs cannot volunteer for 

the program. In this sense, PRAs are more like self-employment assistance (SEA) programs, 

where excluded UI recipients have tried to appeal their profiling scores in order to qualify for the 

services (Messenger, Peterson-Vaccaro, and Vroman 2002). Local staff may therefore need (1) 

rules clearer than those for WPRS for determining which UI recipients should and should not be 

called in for PRA orientations, (2) training and scripts on how to explain to disgruntled recipients 

the criteria on which selection is based, and (3) procedures to handle “appeals” of PRA eligibility 

determinations. 
34

Topics for PRA Orientations 

• PRA amount 

• Period over which award is valid 

• Allowable uses of PRA funds 

• Ability to develop an employment 

plan 

• Eligibility for reemployment 

bonus 

• Process to claim bonus and/or 

request PRA expenditures 

• Procedures for verification of 

bonus eligibility 

• Criteria for approval of PRA 

expenditure requests 

• Payment procedures 

• Terms of the award 

2. Content of the PRA Offers 

“Prior to the establishment of a PRA for an eligible individual, the One-Stop delivery system shall ensure that the 

individual (1) is informed of the requirements applicable to the PRA, including the allowable uses of the funds from 

the account, the limitations on access to WIA services and a description of such services, and the conditions for 

receiving a reemployment bonus; (2) has the option to develop a personal reemployment plan, which will identify 

the employment goals and appropriate combination of services selected by the individual to achieve the employment 

goals; and (3) signs an attestation that the individual will comply with the requirements related to the PRAs . . . and 

will reimburse the account or, if the account has been terminated, the program for any amounts expended under 

from the account that are not allowable.” (H.R. 444 Sec. 135E(c)(1).) 

PRA orientations should cover a wide range of topics. Draft legislation specifies several 

topics to be covered in PRA orientations—including allowable uses of PRA funds and the 

conditions for bonus eligibility (see text box). In addition 

to these requirements, our experiences in the ITA 

Experiment suggest that PRA orientations should cover 

the amount of the PRA award, the period over which it is 

valid, the procedures recipients must use to claim a 

reemployment bonus or request expenditures out of their 

accounts, and the criteria that will be applied to approve 

PRA expenditure requests. This is because, like people 

assigned to Approach 3 of the ITA Experiment—a “true 

voucher” approach with no counseling requirements, PRA 

customers would not have counseling requirements and 

this would make it essential that they leave their 

orientations with a clear sense of the program’s rules and the steps they must follow to use their 

awards. Local staff may also want to explain in detail the interaction between the bonus and 
35

reemployment account features of the award.13 Because of the complex rules and terms of the 

awards, it may also be useful for PRA recipients to receive a detailed, written explanation of the 

program. 

“For the 1-year period following the establishment of the account, claimants may not receive intensive, supportive, 

or training services funded under this title except on a fee-for-service basis.” (H.R. 444 Sec. 135(a)(3)(C).) 

PRA orientations must provide information to help eligible recipients decide whether or 

not to accept the offer. People who accept PRA offers must forfeit their eligibility for staffassisted WIA services for 12 months from the date of establishment of their account. During this 

period, they would be allowed to receive WIA services (beyond core services) only on a fee-forservice basis. One-Stop staff would need to explain these award conditions in detail to eligible 

UI recipients, as, for some, accepting a PRA may represent a significant trade-off in assistance. 

In helping PRA-eligible UI recipients assess this potential trade-off, local areas should be 

prepared to give people some sense not only of their likelihood of qualifying for relatively costly 

WIA services—for example, training—but also of their likelihood of receiving such services—

that is, based on the overall availability of WIA funds locally for such uses. 

ITA models could inform the development of PRA customer agreements. Draft legislation 

specifies that people who accept their PRA offers must sign an agreement certifying that they 

will comply with the program’s requirements and reimburse the government for any 

expenditures that are later deemed unallowable. Some local areas, when awarding ITAs to 

eligible WIA customers, use similar agreements, which could serve as models for PRA customer 

agreements (Exhibits IV.1 and IV.2). 

 13That is, PRA recipients can use their awards to purchase services before claiming a reemployment bonus. 

However, a client who has qualified for the reemployment bonus cannot use PRA funds to purchase services unless 

he or she loses employment because of a “lack of work.” 
 36 

EXHIBIT IV.1 

WORKFORCE DEVELOPMENT, INC. 

CUSTOMER RESPONSIBILITY AGREEMENT

Our Responsibility:

The goal of WIA (Workforce Investment Act) is to return you to work as quickly as possible. The program is 

funded by the Department of Labor and is a short term service program. The program is designed for your 

success! Workforce Development, Inc. is responsible for the delivery of employment and training services 

under WIA in partnership with the Illinois Employment and Training Centers. Core services including 

career counseling, planning, labor market information, job search assistance, on-line job listings and internet 

access will be provided. Intensive services including comprehensive services to overcome barriers and prevocational services including ESL will be provided. Vocational training will be offered in programs through 

approved training institutions on the Illinois State Provider List. 

 

We wish you the best of luck as you embark on your re-entry/entry into the workforce through participation 

in our programs. Your Career Advisor is here to support and assist you. 

Your Responsibility:

___Call to schedule ALL appointments with your Career Advisor. We can not guarantee our availability without an 

appointment. 

___If training services are determined to be necessary, you will have 45 days to find a school and enroll in courses. 

If 45 days elapse, you will have to re-certify to participate in the program. Please contact your advisor if you are 

having difficulty with this process well before the 45 days have expired. 

___ Basic skill levels must be met before funding can be supplied for vocational training. (A 9th grade math and 

reading level must be met for all training programs excluding Information Technology, where a 10th grade math and 

reading score is required). 

___Consult with your Career Advisor prior to registering for any course(s). Workforce Development, Inc. cannot 

reimburse any student for tuition, books or fees that are incurred without an authorized Workforce Development, 

Inc. ITA (individual training account) voucher. 

___If you are taking full-time academic course work at a community college or university you must apply for 

financial aid at the school’s financial aid office before submitting the voucher. A copy of the approval or rejection 

of benefits should be sent to your Career Advisor within two weeks of determination. 

(Persons with a bachelor’s degree or higher and those only pursuing a certificate not a degree need not apply for 

financial aid. Dislocated workers should discuss their status with the financial aid office.) 

___Promptly submit issued vouchers to the designated school to guarantee registration and payment. All vouchers 

must be signed where required. Sign the book voucher again upon receipt of books. 

___If changes are needed on the original registration schedule such as withdrawals, additions or cancellations, 

contact you Career Advisor immediately. No alterations may be made on the voucher itself. Any unauthorized 

changes to the voucher will invalidate it. 

___Withdrawals or changes in your course schedule may also impact Unemployment Insurance benefits. Inform 

your local Illinois Department of Employment Security representative of any changes in course work. 
EXHIBIT IV.1 (continued)

_____________________________________________________________________________ 

DRAFT 37

___You will be required to continue documentation of your job search for the Department of Employment Security 

unless you are attending training full time (12 credit hours of more). 

___Participation in programs under the Workforce Investment Act (WIA) does not extend unemployment benefits. 

Unemployment benefits last for 26 weeks. Currently there is no extension period and no extensions are made. 

___Notify Workforce Development, Inc. if you become employed at any point during your participation in our 

program, (full-time, part-time or temporary), relocate to another area, change telephone number or addresses. This 

information is very important for our files. 

___When your course(s) or vocational training ends, you MUST forward a copy of your certificate(s) or 

credential(s) attained immediately upon completion to your Career Advisor for Department of Labor tracking 

purposes. Grades must be forwarded upon the completion of each semester. Failure to forward your grades or 

certificates will jeopardize further participation in WFD, Inc. sponsored programs. Future vouchers will not be 

written. 

___Upon completion of training and while searching for a job, you are required to maintain contact with your 

Career Advisor at least once per month. This is a minimum. Your Career Advisor is here to help you throughout 

core, intensive, training and job search stages of your return to the workforce. 

___Once you have completed services or training and obtained a job, WFD, Inc. will need information regarding 

your employment in order to show the outcomes of these federally funded services. At a minimum, we will need: 

date of employment, employer’s name, company address, phone number, job title, job description, working 

hours, salary, benefits and supervisor’s name. You must agree to provide this information in order to receive 

services as required by the Department of Labor. This will assist WFD, Inc. in receiving funds in the future 

enabling us to help others. This information is statistical only. In addition, you will be contacted by phone or letter 

for up to 12 months after you re-enter/enter the workforce to determine employment retention rates. This is a vital 

and most important part of the program and federal funding. 

I HAVE READ AND UNDERSTAND THIS AGREEMENT AND WILL COMPLY WITH ITS INTENT. I 

UNDERSTAND THAT ANY DEVIATIONS FROM THIS AGREEMENT WILL JEOPARDIZE APPROVAL 

FOR WORKFORCE DEVELOPMENT, INC. SERVICES. I UNDERSTAND FAILURE TO PROVIDE 

GRADES, COPIES OF CERTIFICATIONS, CHANGE OF ADDRESS/PHONE INFORMATION OR FUTURE 

EMPLOYMENT INFORMATION WILL RESULT IN MY BEING DENIED FUTURE FUNDING FOR 

SERVICES OR TRAINING. 

_____________________________________ ____________________________________ 

Customer’s Signature Career Advisor’s Signature 

_____________ ____________ 

Date Date 

Revised 9/29/2000 

In partnership with the communities of the Northwest Municipal Conference 

Workforce Development, Inc. (formerly known as the Private Industry Council of Northern Cook County) 
38

EXHIBIT IV.2 

“TOOL CHEST” LIST OF ‘I WILLS’ 
39

3. Conducting PRA Orientations 

Workforce administrators would need to make several decisions about how PRA 

orientations should be conducted. For instance, they would have to decide on the most 

appropriate mode, that is, whether PRA orientations should be in-person sessions or whether the 

offer could be presented over the telephone or in a letter with telephone followup; whether, if inperson, individual or group sessions should be conducted; and, if group sessions are preferable, 

whether any of the eligible recipients should have separate orientations. Workforce 

administrators would also need to decide which staff should conduct the orientations. 

PRA orientations are likely to be in-person, group sessions. The overall content and 

complexity of the topics to be covered suggest that these should be in-person sessions.14 

Explaining the details of the PRA policies and procedures to eligible UI recipients is likely to be 

difficult in a letter or over the telephone. In addition, eligible recipients are likely to have 

questions and, if they do not, might still benefit from hearing the answers to questions that other 

eligible people ask. Bringing eligible recipients into the One-Stops for PRA orientations may 

have the added benefit of helping to familiarize them with One-Stop services. Since the offer is 

generally the same across eligible clients, PRA orientations could easily be conducted as group 

sessions. As discussed in Chapter III, local offices are likely to call in enough eligible recipients 

to support group sessions. 

Separate orientations may be desirable for exhaustees. If a state extends PRA eligibility to 

this group, the terms of their offers and allowable uses would differ somewhat from those for 

new UI recipients. These people would be eligible for a reemployment bonus if they secure a 

full-time job within 13 weeks from the date of establishment of their PRA account, rather than 

 14Alternatives such as telephone orientations or mail-based orientations with telephone followup may still be 

desirable in special circumstances, for example, when dealing with claimants from remote rural areas. 
40

within 13 weeks of collecting UI benefits.15 At state option, they would also be allowed to use 

PRA funds for supportive payments. Separate PRA orientations for exhaustees may be needed, 

however, only for the period that states or localities give these people to come forward to learn 

about their PRA awards and claim the benefit, instead of for the full duration of the program. 

UI, ES, and WIA staff are all likely to play a role in PRA orientations. UI and/or ES staff 

could be responsible for calling in eligible recipients and coordinating the scheduling of 

orientations, using procedures like the ones used for WPRS orientations. As we discussed, an 

important component of PRA orientations will be to provide information to help customers 

decide whether to accept the PRA offer and forfeit eligibility for WIA services, and WIA staff 

are likely to be in the best position to explain the potential trade-off. Their involvement would 

also make it possible to incorporate some quick prescreening for WIA eligibility into PRA 

orientations. 

D. OPERATING PRA PROGRAMS 

Workforce administrators would need to develop a wide range of new procedures to 

implement the bonus and voucher components of their PRA programs. They would have to 

devise procedures for PRA recipients to claim their reemployment bonuses, for staff to verify 

eligibility for them, and for bonuses to be paid to qualifying persons. The administrators would 

also need to develop procedures for PRA recipients to request One-Stop (intensive and training) 

services or other expenditures from their accounts; for local staff to review these requests and 

decide whether or not to approve them; for local staff to communicate their approval or denial 

 15As we discuss later, structuring PRAs in this manner—that is, with a firm reemployment deadline—may be 

desirable across the board, rather than just for these PRA claimants. 
41

decisions to PRA recipients and relevant staff; and for PRA recipients to appeal denied 

expenditure or service requests. 

1. Processing Bonus Claims 

Procedures similar to those used in the reemployment bonus demonstrations could be 

used in the new PRA programs. In both the Washington and the Pennsylvania demonstrations, 

participants mailed an initial “Notice of Hire” form to staff at the central UI office.16,17 When 

they received this form, UI staff checked whether the participant met basic eligibility criteria for 

the reemployment bonus—for instance, that the job met the program’s definition of full-time18—

and, if so, mailed a notice informing the recipient that the bonus claim had been accepted.19 

Along with this notice, UI staff also sent a “Bonus Voucher” form and a “Job Change” form that 

the participant had to submit about four months after the start of the qualifying job.20 In the 

Pennsylvania and Washington demonstrations, reemployment bonuses were paid out in a single 

installment and only if the recipient had maintained full-time employment for 16 weeks or 

4 months, respectively. Once the participant mailed in the second claim, central UI office staff 

 16All forms and notices used in the Washington demonstration are available in Appendix A of the final 

evaluation report (Spiegelman et al. 1992). Corson et al. (1991) describe the forms used in the Pennsylvania 

demonstration. We include several of the Washington forms and notices in Appendix D of this paper. 

17“Notice of Hire” forms asked bonus claimants to report the start date of the qualifying job, the number of 

hours worked per week on that job, and contact information for both the qualifying job and for the job held just prior 

to the initial receipt of UI benefits. 

18In the Pennsylvania demonstration, full-time employment was defined as 32 or more hours per week. In the 

Washington demonstration, full-time work was defined as a total of at least 34 hours per week on all jobs or 

sufficient earnings to terminate UI benefit payments. 

19Staff also contacted claimants if more information was required. If the bonus claim was rejected, claimants 

received a notice informing them of this outcome and the reason for it. 

20The Bonus Voucher form reported current employer contact information and average weekly hours, and 

certified that the claimant met all eligibility criteria for claiming a bonus. This form was all that was required if the 

claimant worked at only one job during the four month period. Claimants who worked at more than one full-time 

job during that period were also required to submit the “Job Change” form, which reported employer contact 

information, job start and end dates, and average weekly hours for all jobs during the period. 
42

checked program records to verify both the participant’s monetary and nonmonetary eligibility 

for UI21 and to look for any intervening collection of UI benefits. UI staff verified the 

employment information by telephoning each employer the recipient listed, but only if the 

recipient still appeared to be eligible for the bonus. 

“Sixty percent of the remaining PRA balance shall be paid to the claimant at the time of reemployment. Forty 

percent of the remaining PRA balance shall be paid to the claimant not later than 6 months after the date of 

reemployment.” (H.R. 444 Sec. 135F(c)(2).) 

Such procedures would have to be modified to accommodate two bonus installments. 

Draft legislation specifies that the PRA bonuses shall be paid in two installments—60 percent of 

the remaining PRA balance at the time of reemployment and the other 40 percent no later than 

six months after the date of reemployment. Hence, workforce administrators would have to 

develop procedures for the claiming, processing, and paying of two separate bonus installments. 

PRA bonus eligibility criteria must balance several objectives. Workforce administrators 

would want their programs to provide strong incentives for PRA recipients to intensify their job 

search efforts and consider employment opportunities they may not have considered otherwise. 

At the same time, they would want to minimize incentives for recipients to accept low-quality 

jobs just to qualify for a bonus. Minimizing opportunities for PRA recipients to realize 

unreasonable “windfalls” or “game” the bonus claim process would also be important. To meet 

these objectives, administrators may consider the following options: 

• Allow a wide range of employment options. Self-employment, temporary jobs, or 

working for a relative were not excluded outright from allowable jobs in the bonus 

 21To remain eligible for a reemployment bonus in the Pennsylvania demonstration, after applying for benefits, 

UI claimants had to maintain both monetary and nonmonetary eligibility (Dunstan and Kerachsky 1988). This 

meant, for example, that they could not receive a duration disqualification for UI benefits either because of a late 

arising separation issue or because of a nonseparation issue. However, one-week disqualifications did not affect the 

claimants’ bonus status. 
43

demonstrations. Special rules were nevertheless developed to minimize potential 

abuses associated with employment options.22

• Deny bonuses for recalls to the previous job or placements through a union hiring 

hall. In the Pennsylvania and the Washington demonstrations, paying bonuses for 

such jobs was viewed as inappropriate since “job acquisition was totally dependent 

upon the actions of the employer or union” (Spiegelman et al. 1992).23

• Delay bonus payments. The bonus demonstrations delayed bonus payments to 

ensure that new jobs had some long-run potential. Recipients were allowed to change 

jobs during the reemployment period, as long as there were no employment 

interruptions greater than one week, all jobs worked were full-time, and no UI 

benefits were claimed during the reemployment period. 

• Base bonus eligibility on calendar weeks, instead of benefit weeks.24 Under current 

proposals, UI recipients could suspend benefits claims temporarily just in order to 

qualify for the PRA bonus.25 To avoid such gaming, the bonus demonstrations gave 

all participants a firm reemployment deadline, defined as a fixed number of calendar

weeks from the date of their bonus offer. A calendar-based reemployment deadline 

might also be easier for PRA recipients to understand and for program staff to track.26

State or local staff may need to call employers directly to verify most bonus claims. UI 

wage records are unlikely to be available to verify employment as staff evaluate first or second 

bonus claims, as typically there is a two-quarter delay in the availability of such data. Moreover, 

 22In the Pennsylvania demonstration, for instance, claimants who were self-employed at any time during the 

16-week bonus qualification period were required to submit proof of self-employment along with their Bonus 

Voucher (and the “Job Change” form, if necessary). Acceptable proof included a copy of the IRS Employer’s 

Quarterly Federal Tax Return, an annual federal tax return showing self-employment income, and Employer’s Initial 

Statement for UI, or a state or municipal business license. 

23This might not be a significant concern under PRA programs since claimants with a specific recall date and 

claimants who are hired through a union hiring hall are typically screened out of WPRS selection pools (Needels, 

Corson, and Vannoy 2002), which would make them ineligible for PRAs.

24While the language in the draft legislation may change or ultimately be interpreted more loosely, at present it 

suggests that, for new UI claimants, bonus eligibility will depend on the number of weeks of UI benefits collected. 

25Consider the case of a PRA recipient who has collected 10 weeks of UI benefits and secures an offer for a job 

that will not start for another five weeks. The claimant might stop collecting UI benefits for a couple of weeks—

indicating that he or she was not actively searching for work or was not available to accept employment during that 

period—and resume collecting UI just in time to claim the reemployment bonus. 

26Another complication of basing bonus eligibility on the number of weeks of UI benefits collected is that 

administrators would need to decide what to count as a week—for example, waiting weeks and weeks when only 

partial benefits are collected, only weeks when the claimant collects the full weekly benefit amount, or any calendar 

week when the claimant collects at least one dollar in UI benefits. 
44

some states do not collect the information that would be needed to conduct the desired 

verifications—for instance, employment dates, weeks employed in the quarter, and total hours of 

employment each week. 

Employment verification may delay payment of the first PRA bonus installment. Draft 

legislation specifies that payment of the first bonus installment should occur “at the time of 

reemployment.” Local staff would nevertheless need some time to confirm that clients have 

stopped collecting UI benefits and, as we just discussed, verify their employment. Workforce 

administrators might also want to delay payment of the first bonus installment somewhat (as was 

done in the bonus demonstrations) to discourage PRA recipients from accepting jobs with little 

long-term potential, especially temporary or seasonal jobs. 

Several considerations should inform decisions about how to process bonus claims 

processing. These could include efficiency and consistency in the application of eligibility 

criteria, the burden imposed on individual staff, and potential delays in bonus payments. As the 

PRA program would be new and relatively short in duration, centralized procedures could 

minimize staff training costs and errors in the application of bonus eligibility criteria. Yet a 

decentralized process would spread the verification burden and reduce its impact on the overall 

workload of individual staff. If local staff conduct verification of bonus claims, the outcomes of 

this process could be communicated more quickly to clients and the staff in charge of making the 

payments, which might result in fewer delays in payment. Another important consideration may 

be that, over the past decade, taking of UI claims has increasingly become centralized and 

telephone-based. Hence, One-Stops do not always have a staff person with direct access to UI 

data systems.27 If charged with processing bonus claims, One-Stop staff might need to work 

 27Alternatively, One-Stop staff may have read-only access to UI systems but no substantive, recent training to 

understand or interpret system codes. 
45

with a designated person with access to UI data systems, whom they may call to request UIrelated information.28

2. Processing PRA Expenditure Requests 

PRA recipients would need clear guidance on the steps they would need to follow to request 

services or expenditures to be paid for by their accounts. Once a PRA customer requests a OneStop service or an expenditure out of his or her account, a local staff member would need to 

evaluate the request and decide whether or not to approve it. 

a. Procedures to Request PRA Expenditures 

Customers may use paper forms to request PRA expenditures. Since PRAs include no 

counseling requirements, the level of contact between PRA recipients and One-Stop staff once 

these customers leave their orientations may be quite limited. Local areas may therefore want to 

develop paper forms or other tools for PRA recipients to request One-Stop services and other 

account expenditures. 

ITA request forms could serve as models for PRA programs. Customers assigned to 

Approach 3 in the ITA Experiment use different forms to request approval of their program 

selection and to request ITA expenditures on training-related supplies (see Exhibits IV.3 and 

IV.4). Our experiences developing these forms and observing their use by customers and staff 

suggest several considerations for PRA programs: 

 28An alternative would be to grant WIA/One-Stop staff direct access to UI data systems. We believe that, 

because of data-sharing issues and confidentiality concerns, this is unlikely to happen within the time frame for 

implementation of the PRA program. 
46 

EXHIBIT IV.3 

REQUEST FOR TRAINING FUNDS 

PARTICIPANT:______________________________________________ DATE: ______/______/________

INSTRUCTIONS: Please submit this sheet to your Workforce Development, Inc. counselor for approval. You 

may submit it by mail or in-person. Remember that, for your request to be approved, you must have completed your 

ITA counseling requirements and selected a program within the state’s list of eligible training providers. Once your 

request is approved, your counselor will ask you to register for the program or courses requested and submit a copy 

of your registration paperwork. Your counselor will then issue a voucher, which you must (1) sign and (2) take to the 

training provider for payment. You may pick-up your voucher in person from your counselor or s/he can mail it to 

you. Please allow at least 5 business days for processing of your request.

1. Institution: ______________________________________________________________________________ 

2. Program:________________________________________________________________________________ 

3. Expected Program/Term Start Date: ______/______/______ End Date: ______/______/______ 

4. Training Costs and Resources 

Training Costs Training Resources

Tuition and Fees $ A. Pell Grant $ 

 B. Scholarships/grants $ 

Other required expenses 

(describe): 

$ C. Other (describe): $ 

Total Costs $ Total Resources $ 

5. ITA Amount Requested: $____________________ 

 (NOTE: The ITA amount you request must be less than or equal to the funds remaining in your ITA.) 

--FOR COUNSELOR USE ONLY--

1. Conditions for approval -- Enter “Y” or “ ” to confirm: 

___ Customer has satisfied ITA participation requirements. 

___ Institution/program selected is an approved training option. 

___ Training costs and resources have been fully reported and verified. 

___ Customer has ITA funds available. 

2. Request for ITA funds for training is APPROVED: 

Counselor’s STAFF_ID: [ ___________________ ] Participant’s MPR_ID: [ _____________________ ] 

Signature: ____________________________________________________ Date: [ __________________ ] 

3. ITA funds to be released: 

Current training costs ------------------> [$ ______________ ] 

minus countable resources (A + B) --> [$ ______________ ] Remaining ITA funds: $___________ 

equals need for training support -----> $ ______________ (NOTE: Refer to Participant Status sheet)

Amount approved: [$ ______________ ] 

(NOTE: Enter lesser amount of “need for training support” and participant’s “remaining ITA funds.”) 

Provide payment to: [V_CODE: ___________________] for [P_CODE: __________________]

4. Expected Start Date: [______/______/______] Expected End Date: [ ______/______/______]
47 

EXHIBIT IV.4 

REQUEST FOR TRAINING SUPPLIES 

PARTICIPANT:________________________________________________ DATE:

______/______/_________ 

INSTRUCTIONS: Please complete a separate sheet for each request for training-related supplies and submit it to 

your ITA counselor. You may submit this sheet by mail or in-person. For your request to be approved, you must 

also enclose documentation (for example, a course syllabus or letter from the instructor) showing that the supplies 

requested are a requirement for a course or program that Workforce Development, Inc. has already approved. Also, 

no ITA funds will be released directly to customers. Therefore, you must agree to get the supplies requested from a 

vendor that can be paid directly by Workforce Development, Inc. Once your request is approved, your counselor 

will issue a voucher, which you should (1) sign and (2) take to the agreed-upon vendor for payment. You may pickup your voucher from your counselor or s/he can mail it to you. Please allow at least 5 business days for processing 

of your request.

1. Program/course information: 

 Training Institution: ________________________________________________________________________ 

 Program: ________________________________________________________________________________ 

 Course(s):________________________________________________________________________________ 

 ________________________________________________________________________________________ 

2. Type of supplies being requested (select ONE category): 

_____ Books 

_____ Tools 

_____ Clothes/Uniforms 

_____ Other (Describe: ___________________________________________________________________) 

3. Amount being requested: $________________________ 

 (Note: This amount must be equal to or less than available ITA funds.) 

--FOR COUNSELOR USE ONLY--

1. Conditions for approval (enter “Y” for yes or “ ” to confirm): 

 ___ Supplies requested are a requirement for the approved training program. 

 ___ No other sources of support are available for the services requested. 

 ___ Customer has ITA funds available. 

2. Request for supportive services is APPROVED:

Counselor’s STAFF_ID: [ ___________________ ] Participant’s MPR_ID: [ _____________________ ] 

Counselor’s signature: ________________________________________ Date: [ _____________________ ] 

3. Amount authorized: [$ _______________________________ ] 

 for [S_CODE: _______________________ ] 

 payable to [V_CODE: _______________________ ]
48

• Forms should reflect the full range of possible PRA uses. Draft legislation specifies 

that, subject to some restrictions, PRA funds may be used to purchase intensive 

services, training services, supportive services, and even assistance to purchase or 

lease an automobile. Paper forms may be desirable even when PRA recipients 

request One-Stop services, as existence of a paper trail may help trigger account 

charges for services provided in-house. 

• Forms should include detailed submission instructions. As we noted, One-Stop 

staff may have little contact with PRA recipients after they have attended their 

orientations. Therefore, PRA expenditure request forms should clearly lay out the 

process that PRA recipients must follow to submit their requests (for example, mail 

the form to a given address or submit it in person to a designated One-Stop staff 

member). 

• Forms should include information on the conditions for request approval. PRA 

expenditure request forms should remind customers of the criteria that will be applied 

to evaluate their requests and of any supporting documentation they must provide to 

secure approval.29 Distinct forms, or forms with distinct sections, may be needed for 

various types of PRA expenditures, as different considerations are likely to factor into 

approval decisions for different types of requests.30

• Forms should describe the process to communicate approval or denial decisions. 

PRA expenditure request forms should note the time required to process the request 

and how local staff will notify the customer of its outcome (that is, whether the 

request is approved or denied). This will help avoid unrealistic expectations about 

response time on the part of customers. 

b. Procedures to Evaluate Expenditure Requests 

Staff could follow a two-stage process to evaluate PRA expenditure requests. Before 

examining any PRA service or expenditure request in detail, local staff could perform basic 

checks to ensure that the person can in fact make a request. This determination is likely to be 

based on three main elements: (1) is the person a PRA recipient? (2) does the person still have 

PRA funds available? and (3) is the request for an allowable expense? Staff will also have to 

 29We say remind PRA claimants, since we have assumed that approval criteria would be discussed during PRA 

orientations. 

30The ITA “Supply Request” form, for example, directs customers to enclose a course syllabus or letter from 

the instructor, showing that the supplies requested are a requirement for a training program that has already been 

approved. It also reminds customers that they must agree to obtain the supplies from a vendor that can be paid 

directly by the local One-Stop agency, as no ITA funds are released directly to customers. 
49

check that the PRA recipient has not claimed and been determined eligible to receive a 

reemployment bonus. Approval decisions could then focus on whether the expense is 

appropriate. 

It may be sensible to require PRA expenditure requests to relate directly to employment. 

For the expense to be judged an appropriate use of PRA funds, states and local areas could 

stipulate that PRA requests be expenditures directly related to reemployment or services needed 

to prepare for or search for reemployment. Such a standard would provide guidance and 

flexibility to local staff as they evaluate PRA expenditure requests, without placing excessive 

restrictions on recipients’ use of their PRA awards. For example, it might still be possible for 

PRA recipients to use their accounts to purchase children’s furniture and toys—if they 

substantiate that these expenses are directly related to their employment goal (for example, 

becoming a home-based day care provider) or a prerequisite for employment. 

Caps might also be set for some PRA expenditures. States or local areas might also set 

caps on the maximum amounts—overall or in a particular period—that PRA recipients could 

spend on specific services. This could occur, in particular, if workforce administrators consider 

it inappropriate for PRA recipients to spend their full awards on a particular type of expense—for 

example, health care services, child care, or transportation. 

“A State may authorize exhaustees to withdraw amounts from the PRA on a weekly basis for purposes of income 

support in amounts up to the average weekly amount of UI that the individual received prior to his or her exhaustion 

of rights to UC if the individual is engaged in job search, intensive services, or training that is expected to lead to 

employment.” (H.R. 444 Sec. 135F(b).) 

Designated staff might process requests for income-support payments. When qualifying 

PRA recipients request income support payments, One-Stop staff would first have to verify that 

the person is eligible for such payments (that is, that the person is an exhaustee) and confirm that 

the PRA recipient is still actively engaged in One-Stop services. Local staff would also need to 
50

get information from UI staff on the average weekly benefit amount for these people. Since 

income support would not be an allowable use of account funds for all PRA recipients, to 

minimize errors in the application of eligibility criteria and approval of income support 

payments, local areas may want to designate specialized counselors to work with the customers 

who qualify for such payments. 

3. Managing the Personal Reemployment Accounts 

The final set of PRA procedures that workforce administrators would need to develop 

involve managing the individual accounts. In particular, the administrators would have to decide 

how to establish and track transactions for these accounts. Procedures would also be needed to 

charge the PRAs for staff-assisted WIA services and to make payments to outside providers and 

the PRA recipients themselves. 

a. Establishing and Maintaining PRAs 

Accounts could be managed by a designated staff person. Consistent with general practice 

with ITAs, PRAs could be managed by a designated One-Stop staff person, rather than the 

individual counselors who provide services to PRA recipients or evaluate their service and 

expenditure requests. This staff member would be responsible for establishing the PRAs, 

making payments from the accounts, tracking PRA balances, and generally maintaining the 

accounts. Importantly, the designated accounts manager would have to learn promptly any 

information on which UI recipients accept their PRA offers, become eligible for bonuses, receive 

One-Stop services, or have other PRA expenditures approved. 

Simple procedures may be used to manage PRAs. The local areas that offer ITAs to their 

WIA training customers typically use commercially available software or locally developed 

spreadsheets to track individual obligations, payments, and balances for these training accounts. 
51

While allowable uses of the PRAs would be broader than for ITAs, the approach needed to 

manage PRAs is generally the same. That is, funds would need to be reserved once an eligible 

recipient accepts the PRA offer; payouts would then reduce the balance of funds available in the 

PRAs. Hence, local areas should be able to use similar, uncomplicated procedures to manage 

PRAs. 

Procedures to identify inactive or expired accounts quickly will be important. Because of 

the strict two-year window for localities to award PRAs, workforce administrators would want to 

develop procedures to identify inactive or expired accounts promptly and release any unused 

funds so they can be used to fund PRAs for new customers. An easy way to accomplish this 

would be for each PRA to receive an account expiration date (exactly 12 months after the PRA 

acceptance date). Local staff could use this date to systematically identify and review those 

accounts whose account expiration date has passed and return any unused funds to the overall 

PRA budget. It would also be important to flag the accounts of people who qualify for a first 

bonus installment, so that, if they fail to claim their second bonus installment or fail to qualify 

for it for a reason other than “lack of work,” unused PRA funds are returned promptly to the 

overall PRA budget. 

b. Making Charges to or Payments from PRAs 

Workforce administrators would need procedures to charge PRAs for One-Stop services 

(beyond core services), make payments to outside vendors, and make payments to PRA 

recipients. Deciding how to set prices for staff-assisted services is likely to be a concern. 

However, as we discuss next, we do not expect this to be a major challenge. 

Three factors should inform decisions about the pricing of One-Stop services. At present, 

One-Stops do not generally charge for any of the staff-assisted intensive or training services they 
52

provide to qualifying local customers.31 Hence, local areas are likely to have little, if any, 

experience on which to base decisions about what prices to charge PRA customers who request 

staff-assisted services. Workforce administrators could nevertheless consider three factors: (1) 

the expected demand for staff-assisted services among PRA recipients, (2) One-Stop capacity to 

respond to PRA demand for services, and (3) the overall availability and prices of competing 

alternatives. 

Demand for staff-assisted services among PRA recipients may be low. Analysis of 

preliminary participation data from the ITA Experiment suggests that PRA recipients are 

unlikely to request much counseling (see Appendix B), for two main reasons. First, the services 

are voluntary. Second, being required to pay for them should act as a further disincentive for 

PRA recipients to request them, as spending on services would reduce the potential amount of 

the reemployment bonus or the PRA resources available to pay for training and other 

employment-related needs. 

With low demand for services, local capacity should not be a major constraint. If demand 

for counseling and other staff-assisted services among PRA recipients is low, local areas may be 

able to accommodate any additional service requests without much difficulty. That is, workforce 

administrators should not anticipate having to hire additional staff to increase their service 

delivery capacity. Hence, increased staffing or other costs should not be a major consideration 

as they set the prices for staff-assisted services. 

 31The only exception we have encountered is the Thumb Area Employment and Training Consortium (ETC), 

which serves a four-county rural area in eastern Michigan. This local area has been operating its “tool chest” 

voucher model since 1996. Individual ETC customers receive a “tool chest” that pools funds from all the programs 

for which the customer qualifies. With staff approval, customers are allowed to use funds from their “tool chest” 

account to purchase a wide range of employment, training, and supportive services, including individualized 

assistance from or workshops led by ETC staff. 
53

The principal consideration in setting One-Stop prices may be competitors’ prices. To 

encourage PRA recipients to use in-house services as much as possible, local areas would want 

to ensure that they price their services competitively. Workforce administrators may want to 

examine closely the prices charged by local competitors—for example, resume-help agencies or 

employment brokers—for services similar to those offered at their One-Stops. 

Existing procedures could be used to pay certified providers. Workforce administrators 

would need procedures to pay outside providers for services such as training and other allowable 

uses of the accounts (for example, book purchases or assistance with child care). One-Stops tend 

to have existing relationships with a wide range of providers of specialized supplies and services, 

and we expect them to encourage PRA recipients to use this established network as much as 

possible. When PRA recipients use certified One-Stop providers, local areas should be able to 

use the same procedures they currently use to pay them. 

New procedures will be needed to pay out-of-network providers. To prevent fraud and 

misuse of PRA funds, we would expect local areas to insist on having out-of-network providers 

bill them directly for services whenever possible, especially if the expense is substantial (for 

example, training from a provider outside the state’s Eligible Training Provider List). When 

provider billing is impractical or infeasible, local areas may ask PRA recipients to pre-pay for the 

expense and then get reimbursed. 

Convenience might promote the use of certified providers. The convenience of obtaining 

services or supplies without first having to obtain quotes or vouchers could encourage PRA 

customers to use certified providers.32 PRA recipients who insist on using an out-of-network 

 32Local areas usually have established agreements with certified providers whereby these providers bill them 

directly for services (such as training) or supplies (such as tools, books, or uniforms) that have been preapproved for 

WIA customers.
54

provider could be required to cover the expense out of pocket first and then provide 

documentation that the service was in fact received in order to receive reimbursement. If this 

option is offered, it would be important to stress to PRA customers that they should secure 

expense approval before they incur it or, otherwise, they may not get reimbursed. 

Local areas will need procedures to pay bonuses, provide income support, and make other 

direct payments to PRA recipients. Payment of reemployment bonuses should be 

straightforward, as it would involve only the mailing of checks to the recipients. It is likely that 

few PRA customers would qualify for income-support payments. We would expect local areas 

to limit other direct payments to PRA recipients to supportive services (mainly child care and 

transportation) and reimbursement for pre-approved, out-of-pocket expenditures. 

E. COLLECTING DATA ON PRA PROGRAMS 

In addition to deciding how to operate PRA programs, workforce administrators would need 

to decide what information to collect about them. Experience with similar or related programs 

suggests that data must be collected for two main purposes: (1) supporting and refining PRA 

operations and (2) evaluating the program’s results. Federal agencies are also likely to 

implement their own reporting requirements, and states and local areas would need to collect 

data to meet these requirements.33 Some of the information collected may support several 

purposes. 

Some data would help operate and refine PRA operations. As PRA programs operate, it 

would be important to maintain records on the people who accept PRA offers. One-Stop staff 

 33Answers to questions on PRAs posted in the DOL Web site, for example, indicate that “states will be 

required to conduct a yearly audit of the financial management of the PRA program, at which time a statistically 

significant sample of individual PRAs will be reviewed (“Personal Reemployment Accounts – Questions and 

Answers,” available at [www.doleta.gov/reemployment/Final_QA.cfm], February 28, 2003). 
55

would need this information to ensure that PRA recipients do not receive multiple offers during 

the program’s implementation period or access WIA services for 12 months from the date they 

accept a PRA award. As was discussed in Chapter III, workforce administrators would need 

information on the take-up rates of PRA offers and average expenditures out of the accounts in 

order to adjust over time the number of offers they make and ensure that they use their full 

allocations. 

Workforce administrators will want to know the results of PRA programs. Data on takeup rates and average PRA expenditures would be important in evaluating PRA program results. 

Information on the outcomes for people who participate in PRA programs would also be 

important, including their receipt of UI benefits (both number of weeks and amount of benefits 

collected), reemployment rates, and reemployment wages. Collecting information on customer 

satisfaction could be important as well. 

Process information could yield useful lessons. It may be helpful to also collect some 

“qualitative” information, for example, on the principal reasons why UI recipients turn down 

their PRA offers; how often first and second bonus claims are denied and for what reasons; how 

often PRA expenditure requests are denied and for what reasons; the most common uses of PRA 

funds; and utilization patterns of staff-assisted One-Stop services among PRA recipients. This 

information should provide useful lessons for future programs that use similar strategies. 

 57 

REFERENCES 

Center for Law and Social Policy. “The Workforce Investment Act: A First Look at 

Participation, Demographics, and Services.” Washington, DC: CLASP Program Update, 

Workforce Investment Act, Update No. 1, March 2003. 

Corson, Walter, Paul Decker, Shari Dunstan, and Stuart Kerachsky. Pennsylvania Reemployment 

Bonus Demonstration: Final Report. Unemployment Insurance Occasional Paper 92-1, 

Washington, DC: U.S. Department of Labor, Employment and Training Administration, 

1992. 

D’Amico, Ronald, and Jeffrey Salzman. An Evaluation of the Individual Training 

Account/Eligible Training Provider Demonstration. Draft report prepared for the 

Employment and Training Administration, U.S. Department of Labor, 2002. 

D’Amico, Ronald. “Implementation Challenges in WIA Title I Adult and Dislocated Worker 

Services.” Unpublished paper presented at the 24th Annual Research Conference for the 

Association for Public Policy Analysis and Management, held in Dallas, Texas, November 

2002. 

Decker, Paul T., and Christopher J. O’Leary. An Analysis of Pooled Evidence from the 

Pennsylvania and Washington Reemployment Bonus Demonstrations. Unemployment 

Insurance Occasional Paper 92-7. Washington, DC: U.S. Department of Labor, 

Employment and Training Administration, 1992. 

Dickinson, Katherine P., Suzanne D. Kreutzer, Richard W. West, and Paul T. Decker. 

Evaluation of Worker Profiling and Reemployment Services: Final Report. Research and 

Evaluation Report Series 99-D. Washington, DC: U.S. Department of Labor, 1999. 

Dunstan, Shari, and Stuart Kerachsky. “Design of the Pennsylvania Reemployment Bonus 

Demonstration Program.” Princeton, NJ: Mathematica Policy Research, Inc., 1988. 

Messenger, Jon C., Carolyn Peterson-Vaccaro, and Wayne Vroman. “Profiling in SelfEmployment Assistance Programs.” In Targeting Employment Services, edited by Randall 

W. Eberts, Chistopher O’Leary, and Steven Wandner. Kalamazoo, MI: W.E. Upjohn 

Institute for Employment Research, 2002. 

Needels, Karen, Walter Corson, and Walter Nicholson. Left Out of the Boom Economy: UI 

Claimants in the Late 1990s. ETA Occasional Paper 2002-03. Washington, DC: U.S. 

Department of Labor, Employment and Training Administration, 2001. 

Needels, Karen, Walter Corson, and Michelle Vannoy. “Evaluation of the Significant 

Improvement Demonstration Grants for the Provision of Reemployment Services for UI 

Claimants.” Final Report. Princeton, NJ: Mathematica Policy Research, Inc., July 2002. 

O’Leary, Christopher J., Paul T. Decker, and Stephen A. Wandner. “Cost-Effectiveness of 

Target Reemployment Bonuses.” Unpublished manuscript. 2003. 
 58 

Perez-Johnson, Irma L., and Paul T. Decker. “What Can We Expect Under Personal 

Reemployment Accounts? A Discussion Based on Preliminary Analysis of Data from the 

ITA Experiment.” Draft Paper. Princeton, NJ: Mathematica Policy Research, Inc., 2003. 

Perez-Johnson, Irma L., Paul Decker, Sheena McConnell, Rob Olsen, and Jacquie Anderson. 

“The Individual Training Account Demonstration: Design Report.” Final Report. 

Washington, DC: Mathematica Policy Research, September 2000. 

Spiegelman, Robert G., Christopher O’Leary, and Kenneth J. Kline. The Washington 

Reemployment Bonus Experiment: Final Report. Unemployment Insurance Occasional 

Paper 92-6, U.S. Department of Labor, Employment and Training Administration, 

Unemployment Insurance Service, 1992. 

Wandner, Stephen A., and Andrew Stettner. “Why Are Many Jobless Workers Not Applying for 

Benefits?” Monthly Labor Review, June 2000, pp. 21-32. 
APPENDIX A 

CALCULATION OF PREDICTED IMPACTS OF 

PRA REEMPLOYMENT BONUSES

 A.3 

TABLE A.1 

CALCULATION OF PREDICTED IMPACTS OF PRAS ON BONUS RECEIPT, 

METHOD 1 

 PRA Amount/Duration 

 $3,000/13 Weeks $2,000/13 Weeks $1,000/13 Weeks 

1. Value of PRA Amount in 1989 Dollars 2,040 1,360 680 

2. Unadjusted Estimated Bonus Receipt Rate, 

Based on Function in Decker and O’Leary 

(1991, Percentage) 27.3 22.0 16.7 

3. Bonus Receipt Rate in Pennsylvania 

Demonstration (Percentage) 13.2 13.2 13.2 

4. Additional Percent Eligible and Likely to 

Claim a Bonus Under PRA Rules 

(Percentage) 6.9 6.9 6.9 

5. Adjustment Factor to Apply to Rate in Line 2 

to Account for Additional Percent Eligible 1.52 1.52 1.52 

6. Estimated Bonus Receipt Rate (First 

Installment Only), Unadjusted for Economic 

Conditions (Percentage) 41.5 33.4 25.4 

7. Discount Factor for Economic Conditions 0.79 0.79 0.79 

8. Fully Adjusted Predicted Bonus Receipt Rate 

(Percentage) 32.9 26.5 20.1 

Notes: 

1. Based on the change in the consumer price index (CPI), 1989 to 2003. 

2. Based on estimated function presented in Table II.4 in Decker and O’Leary (1991): (Bonus Receipt Rate) = 

-.20 + (bonus amount x 0.78) + (bonus duration x .89), where bonus amount is measured in hundreds of dollars 

and bonus duration is measured in weeks. 

3. Bonus receipt rate for $1,000/12-week bonus offer in the Pennsylvania Reemployment Demonstration (Corson 

et al. 1992, Table VI.1, p. 77). 

4. Based on information on bonus eligibility in the Pennsylvania Reemployment Bonus Demonstration (Corson et 

al. 1992, Tables VI.1 an VI.5, pp. 77 and 84). Calculation assumes that recalls and part-time workers will not 

be eligible for a PRA reemployment bonus. Also assumes that claimants not paid a bonus in the demonstration 

due to job retention would be eligible for the first installment of the PRA reemployment bonus. This includes 

1.7 percent of Pennsylvania claimants who file an eligible notice of hire but were not paid a bonus plus the 6.9 

percent of Pennsylvania claimants who did not file a notice of hire but appeared to be eligible for a bonus. We 

assume that under PRAs, 80 percent of these eligible claimants (1.7 percent + 6.9 percent) would claim the first 

bonus installment. 

5. The sum of lines 3 and 4 divided by line 3. 
TABLE A.1 (continued) 

 

DRAFT A.4 

6. Line 2 multiplied by line 5. This is the predicted PRA bonus receipt rate if current economic conditions were 

comparable to 1989, the time of the bonus demonstration. 

7. Based on the ratio of the 12-month average of UI exhaustion rates from June 1989 and January 2003. 

8. Line 6 multiplied by line 7. 
 A.5 

TABLE A.2 

CALCULATION OF PREDICTED IMPACTS OF PRAS ON BONUS RECEIPT AND UI RECEIPT, 

METHOD 2 

 PRA Amount/Duration 

 $3,000/13 Weeks $2,000/13 Weeks $1,000/13 Weeks 

1. Value of PRA Amount in 1989 Dollars 2,040 1,360 680 

2. Estimated Increase in Impact on UI Exit Rate 

(by 12 Weeks) (Percentage) 2.1 0.7 -0.6 

3. Estimated Impact on UI Exit Rate (by 12 

Weeks) (Percentage) 5.8 4.4 3.1 

4. Adjusted Predicted Bonus Receipt Rate 

(Percentage) 31.3 29.9 28.6 

5. Estimated Reduction in UI Weeks per 

Recipients Based on Decker and O’Leary 

(1991) -1.19 -0.91 -0.62 

6. The Additional Effect of Targeting the Bonus 

Offer (UI Weeks) -.047 -0.47 -0.47 

7. Predicted Impact on UI Weeks, Adjusted for 

the Impact of Targeting -1.66 -1.38 -1.09 

Notes: 

1. Based on the change in the consumer price index (CPI), 1989 to 2003. 

2 & 3. Based on Table VII.5 in Corson et al. (1992). 

4. Based on the 1998 reemployment rate among UI recipients referred to WPRS as of 14 weeks since their pre-UI 

job (Needels, Corson, and Nicholson 2001), plus line 3, the estimated impact on the UI exit rate. The 1998 

reemployment rate among UI recipients is adjusted to account for the changes in economic conditions between 

1998 and 2003. 

5. Based on estimates presented in Tables III.4 and III.5 in Decker and O’Leary (1992), making adjustments to 

account for the parameters of the PRA offer. 

6. Based on the increase in UI impacts in the bonus demonstrations of targeting the highest bonus offers (with long 

durations) to the claimants with benefit exhaustion probabilities in the top 25 percent (O’Leary, Decker, and 

Wandner 2003). 

7. Line 5 plus line 6. 

APPENDIX B 

PRELIMINARY ANALYSIS OF DATA FROM 

THE ITA EXPERIMENT 

Contract No.: N-7731-9-00-87-30

MPR Reference No.: 8641-420

What Can We Expect 

Under Personal 

Reemployment Accounts? 

A Discussion Based on 

Preliminary Analysis of 

Data from the ITA 

Experiment 

October 30, 2003 

Irma L. Perez-Johnson 

Paul T. Decker 

Submitted to: 

U.S. Department of Labor 

Employment and Training Administration 

200 Constitution Ave., NW 

Room N-5637 

Washington, DC 20210 

Project Officer: 

Janet Javar 

Submitted by: 

Mathematica Policy Research, Inc. 

P.O. Box 2393 

Princeton, NJ 08543-2393 

Telephone: (609) 799-3535 

Facsimile: (609) 799-0005 

Project Director: 

Paul Decker 
 1

INTRODUCTION 

On January 7, 2003, President Bush unveiled his economic stimulus plan, which included a 

proposal for a new program of Personal Reemployment Accounts (PRAs). The broad goal of 

PRAs is to provide unemployed workers who are likely to exhaust their unemployment insurance 

(UI) benefits with additional assistance and incentives to help them get back to work sooner. 

Under the new program, the federal government would offer states a total of $3.6 billion over 

two years. The money would fund PRAs of up to $3,000 each, and states would decide the 

uniform amount offered to individuals qualifying locally. PRA recipients would have 12 months 

to spend their accounts. 

As formulated, PRAs would differ from the standard operating practices of the nation’s 

workforce investment system in two important ways. First, PRA recipients who secure 

employment during their first 13 weeks of collecting UI benefits would be eligible for a 

reemployment bonus up to the full balance of their PRA. Such bonuses are not currently offered 

and would be much larger than those tested in any prior demonstrations. Second, PRAs would 

shift the reemployment assistance that one-stop career centers offer from a free, uncapped, but 

closely managed benefit to a capped benefit that individuals can manage more flexibly. PRA 

recipients could use their awards to purchase services and supports—through one-stop centers, 

outside sources, or a combination of these—that may help them secure employment. These 

services would include assessment, career counseling, training, and supportive services.1

 

Participation in these services would be voluntary, and PRA recipients would have to pay for any 

staff-assisted services they request with funds out of their accounts. Thus, the PRA award 

represents the maximum total value of intensive services and training assistance that an 

individual might receive. Currently, one-stop centers offer counseling and other services to 

qualifying customers free and with no explicit caps on the total dollar value of the assistance they 

may receive. Nevertheless, local staff determine the appropriateness of particular services for 

individual customers. Because of these differences, federal, state, and local administrators would 

face important planning and operational challenges in implementing the proposed PRAs. 

Information about the experiences of one-stop customers enrolled to date in the Individual 

Training Account (ITA) Experiment—which Mathematica Policy Research, Inc. (MPR) is 

conducting for the U.S. Department of Labor (DOL)—should help DOL officials and other state 

and local administrators plan for implementation of PRAs.2

 The experiment is rigorously 

evaluating three approaches to the administration of training vouchers required under the 

Workforce Investment Act of 1998 (WIA). One of the “treatments” being evaluated—Approach 

3—resembles the proposed PRAs in important ways. Approach 3 is a “pure voucher” approach, 

in which customers receive a fixed ITA amount and can decide how to spend these resources on 

training. These customers can make their own training decisions independently or ask one-stop 

 1

PRA recipients would not have to pay for core services available through the one-stop system. These 

generally include self-access services (for example, job listings, resume-writing help, or participation in workshops 

on transferable skills, interviewing, and other job search skills) to help individuals find and retain employment.

2

The ITA Experiment is being implemented in eight local workforce investment areas. For a full description of 

the approaches being evaluated and the study’s design, see Perez-Johnson et al. 2000. 
 2

staff for help in making the decisions. In contrast, customers assigned to Approaches 1 and 2 

must participate in structured counseling activities to help them make appropriate provider and 

program selections. ITA recipients may only use their awards to pay for direct training costs and 

training-related expenses, however. Unlike PRA recipients, ITA recipients may not “cash out” 

the balance of their account as a bonus if they become reemployed quickly, and they may not use 

remaining funds for employment-related needs. 

In this paper, we use preliminary findings from the ITA Experiment to address the following 

important policy questions related to implementation of the proposed PRAs:3

• To what extent might PRA recipients participate in voluntary counseling? Our 

analysis suggests that PRA recipients are unlikely to participate in voluntary 

counseling.

• To what extent might PRA recipients participate in training? We expect that most 

PRA recipients would try to qualify for a reemployment bonus before they pursue 

training, which would limit the overall training rate among PRA recipients. 

However, training rates could be high among those PRA recipients who do not 

qualify for a reemployment bonus.

• What are the likely per-participant costs of a PRA program? PRA recipients are 

likely to use up their full awards, whether or not they pursue training.

We base our discussion on analysis of participant-level data from the experiment’s studytracking system. MPR, in collaboration with DOL, developed this data system to track service 

receipt and training among ITA study participants. We conducted a full extract of data from the 

system as of January 27, 2003, and examined those items that were most relevant for the 

questions listed above. The extract includes data on more than 4,000 people enrolled in the study 

and randomly assigned to one of its three approaches (Table 1). 

The discussion in this paper focuses on data for customers assigned to Approach 3 of the 

ITA Experiment—the approach that most closely resembles PRAs. Where appropriate, however, 

we compare data across the three approaches being tested. We do this to provide information on 

how making counseling mandatory may influence service receipt and rates of training 

participation among potential PRA recipients. 

 3

This analysis was conducted as part of a special add-on to the Evaluation of the ITA Demonstration. As part 

of this add-on, MPR staff are conducting a series of tasks to support DOL staff as they develop regulations and other 

state guidance on the implementation of PRAs (assuming legislative passage). Our findings are preliminary, since 

data on the characteristics and experiences of ITA study participants will be analyzed more fully when the ITA 

Experiment has been completed. Study implementation began in the last of eight local areas in August 2002 and is 

expected to last for a maximum of 18 months (through February 2004 in the most recent site). 
 3

TABLE 1 

OVERALL PARTICIPATION IN THE ITA EXPERIMENT 

Overall Percentage 

Dislocated 

Workers Percentage Adults Percentage 

Total Enrollment 4,441 100.0 3,156 71.1 1,285 28.9 

Assignment, by Approach 

Approach 3 1,477 33.3 1,003 31.8 474 36.9 

Approach 2 1,490 33.6 1,090 34.5 400 31.1 

Approach 1 1,474 33.2 1,063 33.7 411 32.0 

Enrollment, by Grantee Site 

Phoenix, AZ 337 7.6 214 6.8 123 9.6 

Maricopa County, AZ 284 6.4 189 6.0 95 7.4 

Bridgeport, CT 177 4.0 66 2.1 111 8.6 

Jacksonville, FL 550 12.4 248 7.9 302 23.5 

Atlanta, GA 1,119 25.2 948 30.0 171 13.3 

Northeast Georgia (RDC) 145 3.3 65 2.1 80 6.2 

Northern Cook County, IL 1,059 23.9 862 27.3 197 15.3 

Charlotte, NC 770 17.3 564 17.9 206 16.0 

Distribution, by Months in the 

Experiment 

Less than one month 266 6.0 176 5.6 90 7.0 

One month to less than two months 490 11.0 332 10.5 158 12.3 

Two months to less than four months 1,083 24.4 670 21.2 413 32.1 

Four months to less than six months 1,138 25.6 766 24.3 372 28.9 

Six months or more 1,464 33.0 1,212 38.4 252 19.6 

Source: Study Tracking System for the ITA Experiment (data extract as of January 27, 2003). 

Note: Percentages may not sum to 100 due to rounding. 

RDC = Regional Development Commission. 
 4

A. How Similar Are ITA Study Participants to Likely PRA Recipients? 

Before we can address the policy questions listed above, we need to identify the part of the 

ITA participant sample that most resembles the expected PRA recipients. This will allow us to 

conduct our data analysis on a sample that is most relevant for PRAs. 

As currently proposed, PRAs would target unemployed individuals who are receiving UI 

benefits and who are most at risk of exhausting their benefits. This is likely to include 

individuals who are dislocated from their occupations or industries of employment. In contrast, 

ITAs target individuals who actively seek services from a local one-stop center and express 

interest in training support. Hence, the populations served through ITAs and PRAs are likely to 

differ somewhat. The UI recipients that PRAs would target are likely to have strong attachments 

to the labor force, yet are unemployed at the time they receive benefits. In contrast, some ITA 

study participants may not have strong attachments to the labor force, while some may be 

employed when they receive their ITAs. ITA participants are also actively pursuing services and 

are eligible for training, while some of the UI recipients PRAs would target may not be eligible 

for the same services or be interested in them. 

Despite these differences, we expect considerable overlap between the ITA participants 

represented by our sample and the UI recipients who would receive PRAs. Most of the ITA 

participants are unemployed workers with some degree of labor force attachment. Table 2 shows 

that nearly 100 percent of ITA participants report having been employed in the past, and more 

than 90 percent report being unemployed at the time of intake.4

 Most of those unemployed 

reported losing their job in the past year. More than two-thirds of unemployed participants 

reported leaving their previous job due to a layoff or a business closing. Not surprisingly, the 

unemployment rate and proportion unemployed due to a layoff or plant closing is substantially 

higher for dislocated workers than for other ITA participants. For the dislocated workers, more 

than 96 percent are unemployed, and nearly 85 percent of the unemployed lost their job due to a 

layoff or business closing. 

We focus the rest of our analysis on the dislocated workers in the ITA participant sample. 

Since this group has such a high proportion of people unemployed due to layoff or business 

closings, it should also have a high rate of overlap with the UI population, especially those most 

likely to receive a PRA offer because they have a high probability of exhausting their UI 

benefits. 

We include only those dislocated workers who have been enrolled in the study for at least 

one month. We did this to ensure that the observed participants have had a chance to participate 

in ITA-related counseling and that local staff have had an opportunity to enter participation data 

into our tracking system. As Table 1 shows, 94 percent of the dislocated workers enrolled and 

randomly assigned as of January 27, 2003, had been in the experiment for one month or longer.

 4

We did not collect baseline data on UI receipt among the ITA participants. As part of a second task under this 

special add-on, we analyzed WIA administrative data from a local area participating in the ITA Experiment. These 

data confirmed that a high proportion of dislocated worker customers are UI recipients and, hence, likely to be 

targeted for WPRS. 
5 

TABLE 2 

CHARACTERISTICS OF ITA STUDY PARTICIPANTS 

Overall 

Dislocated 

Workers Adults 

Age at Enrollment (Years) 

Minimum 18.1 18.2 18.1 

Average 40.7 42.2 37.2 

Maximum 73.9 73.9 66.2 

Gender (Percentage) 

Female 51.7 47.4 62.3 

Male 48.3 52.6 37.7 

Years of Regular School (Percentage) 

7 or less 0.2 0.1 0.3 

8 to 11 7.7 5.9 12.0 

12 36.2 31.5 47.9 

13 to 15 27.6 28.1 26.3 

16 18.4 22.0 9.6 

More than 16 9.9 12.3 4.0 

Employment Status at Enrollment (Percentage) 

Unemployed 91.1 96.2 78.5 

Employed 8.7 3.7 21.0 

Never worked 0.2 0.1 0.5 

When Did Last Job End (Percentage of 

Unemployed at Enrollment) 

Within the past month 11.7 11.4 12.6 

More than 1 month ago but within past year 76.2 80.4 63.6 

1 or 2 years ago 9.5 6.6 18.3 

3 or 4 years ago 1.1 0.9 2.0 

5 or more years ago 1.1 0.6 2.7 

Reasons Why Left Last Job (Percentage of 

Unemployed at Enrollment) 

Laid off 62.9 74.8 27.0 

Business closed 8.0 9.1 4.9 

Temporary/seasonal job ended 5.2 3.0 11.9 

Discharged or fired 11.2 8.3 20.1 

Quit to take another job 0.5 0.1 1.6 

Quit for family reasons 2.0 0.3 7.1 

Quit due to health problems/injury 2.0 0.6 6.0 

Other reason 7.8 3.8 20.0 

Years Worked at Current/Most Recent Job 

(Average) 4.1 4.9 2.2 

Source: Study Tracking System for the ITA Experiment (data extract as of January 27, 2003). 

Note: Percentages may not sum to 100 due to rounding and unusable responses. 
6 

B. To What Extent Might PRA Recipients Participate in Voluntary Counseling? 

• Our preliminary analysis of data from the ITA Experiment suggests that PRA 

recipients are unlikely to participate in voluntary counseling. 

The approaches being tested in the ITA Experiment vary in the number of steps required to 

get access to training. To gain access to an ITA, customers assigned to Approach 3 only need to 

attend an orientation. During orientation, Approach 3 customers learn the value of their ITA 

award, the allowable uses of their ITA funds, the available provider and program choices, and 

how to submit their program selections and secure approval. Local staff also review the menu of 

counseling services and activities available at the one-stop center to help customers formulate 

decisions about training. Approach 3 customers are then told that they may participate in any of 

these activities on a voluntary basis but must ask local staff for the assistance. Customers 

assigned to Approaches 1 and 2 must attend similar orientations, but they must also complete 

subsequent counseling, with more intensive requirements for Approach 1 than Approach 2. 

In comparing approaches, the data reveal two key findings about service participation. First, 

customers assigned to Approach 3, which has minimal counseling requirements, are more likely 

to attend orientation so they can pursue training. Among all dislocated workers enrolled in the 

ITA Experiment for at least one month, about 66 percent attend orientation, as shown on the 

second line of Table 3. The rate of orientation attendance varies by approach, suggesting that 

subsequent counseling requirements affect the decision to initiate services and seek training. The 

rate of orientation attendance declines somewhat as the counseling requirements are intensified: 

Approach 3 has the highest rate of attendance (69 percent), followed by Approach 2 (65 percent), 

with Approach 1 having the lowest rate (63 percent). Approach 3 is associated with a modestly 

higher rate of training pursuit, as it reduces the “hoops” through which customers must “jump” to 

pursue training. These differences are relatively small, however, with the rates for all 

approaches falling into the 60 to 70 percent range. Therefore, at least 30 percent of customers 

choose to forgo ITA participation, regardless of how their ITAs are specified or administered. 

Our second key finding is that few Approach 3 customers access any voluntary counseling 

services beyond orientation. As shown in the third line of Table 3, only 6 percent of the 

dislocated workers assigned to Approach 3 participate in any counseling beyond orientation, 

compared with 55 percent of Approach 2 customers and 59 percent of Approach 1 customers. 

Hence, when given the choice, customers pursuing training typically do not participate in 

counseling to help them select a training occupation and provider. 

Applying these findings to PRAs suggests strongly that PRA recipients are unlikely to use 

their PRAs to purchase substantial training-related counseling. Even customers who are offered 

these services free, as in Approach 3 of the ITA Experiment, generally choose to forgo them. In 

contrast, PRA recipients would have to use resources from their PRAs to pay for any counseling 

or other individualized assistance they request from one-stop staff. This would be a disincentive 

to participate in counseling and might result in even lower rates of participation among PRA 

recipients. Early in their unemployment spells, PRA recipients would probably minimize their 

use of counseling because they would not want to decrease the amount of a potential
7 

TABLE 3 

PARTICIPATION IN ITA COUNSELING 

 Overall Approach 3 Approach 2 Approach 1 

 Number Percentage Number Percentage Number Percentage Number PercentageNo Counseling After Random Assignment 987 33.7 300 30.5 347 34.3* 340 36.2*** Attended Approach-Specific ITA Orientation 1,932 65.9 680 69.2 659 65.1* 593 63.2*** 

Attended Any Counseling Beyond ITA

Orientation 1,165 39.7 58 5.9 553 54.6*** 554 59.1*** 

Participation in Post-Orientation Counseling 

Guide to high-return training 604 20.6 20 2.0 39 3.9 545 58.1 

Review of high-wage, high-demand

occupations 586 20.0 25 2.5 35 3.5 526 56.1 

Program research 1,045 35.6 24 2.4 540 53.4 481 51.3 Training costs form(s) 971 33.1 5 0.5 514 50.8 452 48.2 Training options comparison 595 20.3 3 0.3 509 50.3 83 8.8 

Training costs and benefits 487 16.6 1 0.1 58 5.7 428 45.6 

Income and expenses 950 32.4 3 0.3 508 50.2 439 46.8 Training budget 924 31.5 1 0.1 497 49.1 426 45.4 

Average Number of Activities (Including Orientation) 2.8 0.8 3.3*** 4.2*** 

Source: Study Tracking System for the ITA Experiment (data extract as of 1/27/03). Note: Analysis is restricted to dislocated workers enrolled in the ITA Experiment for one or more months.  *Difference relative to Approach 3 is significantly different from zero at the .10 level, two-tailed test  **Difference relative to Approach 3 is significantly different from zero at the .05 level, two-tailed test. ***Difference relative to Approach 3 is significantly different from zero at the .01 level, two-tailed test.
8 

reemployment bonus. After the potential for a reemployment bonus is gone, PRA recipients 

would still have a strong disincentive to request counseling, since paying for counseling would 

reduce the amount available to pay for training or other employment-related needs. In 

responding to these trends, local areas would need to consider carefully how much they charge 

PRA recipients for staff-assisted services. They could also change the services they provide to 

make them more appealing to PRA customers or market available services more intensively.

C. To What Extent Might PRA Recipients Participate in Training? 

• We believe that most PRA recipients will try to qualify for a reemployment bonus 

before they pursue training, which may limit the overall training rate among PRA 

recipients. However, training rates are likely to be high among those PRA 

recipients who are interested in training and do not qualify for a reemployment 

bonus. 

In the ITA Experiment, Approach 3 customers who want to initiate training must only 

submit their program selections to a local counselor. If the customer has attended the required 

orientation and the state’s Eligible Training Provider List covers the selection, the counselor 

must approve the request and the customer can start training. In contrast, customers assigned to 

Approaches 1 and 2 must first complete their approach-specific counseling requirements. 

Approach 3 customers have significantly higher rates of training approval, which is not 

surprising given the approach’s automatic approval features. As Table 4 shows, 59 percent of 

Approach 3 customers have made an approved training selection, compared with 50 percent of 

Approach 2 customers and 49 percent of Approach 1 customers. Since Approach 1 and 2 

customers need time to complete their counseling requirements, it seemed possible, however, 

that the lower training rates for these approaches reflect delays in customers’ entry into training. 

To investigate this possibility, we restricted our analysis to dislocated workers who have been 

enrolled in the experiment for at least four months, instead of one month. Under this more 

restrictive specification, the differences in rates of training approval across approaches persist: 

66 percent for Approach 3, compared with 57 percent for Approach 2 and 56 percent for 

Approach 1 (not shown in table). This suggests that, indeed, the differences are not due only to 

differences in timing of training entry. 

At this stage in the ITA Experiment, no evidence suggests that people who are not guided in 

their selection of training will have worse outcomes. However, it is still relatively early in the 

study and our data are far from complete. Many of the participants in our sample have only 

recently begun training, and few have completed their chosen program. Thus, we have not 

observed their final training outcomes. The data recorded in our tracking system so far show that 

Approach 3 dislocated workers who have secured program approval are as likely as other 

dislocated workers in our study to have completed their approved programs. As the last line in 

Table 4 shows, 16 percent of Approach 3 customers have completed their approved training 

programs, compared with 16 percent of Approach 2 customers and 17 percent of Approach 1 

customers. Approach 3 customers also appear about as likely to discontinue their approved
9 

TABLE 4 

PARTICIPATION IN TRAINING 

 Overall Approach 3 Approach 2 Approach 1 

 Number Percentage Number Percentage Number Percentage Number PercentageITA Participants, by Training Status A – A program has been approved 616 21.0 227 23.1 213 21.0 176 18.8 

B – Confirmed to have begun approved training 651 22.2 247 25.2 205 20.3 199 21.2 C – Confirmed to have completed approved 

training 256 8.7 93 9.5 83 8.2 80 8.5 

D – Discontinued approved training 22 0.8 9 0.9 8 0.8 5 0.5 

N – A program has not been approved 

Active cases 1,064 36.3 325 33.1 384 37.9 355 37.8 

Closed cases 323 11.0 81 8.2 119 11.8 123 13.1 

Total 2,932 100.0 982 100.0 1,012 100.0 938 100.0 

ITA Participants Having Secured Program Approval 1,545 52.7 576 58.7 509 50.3*** 460 49.0*** 

Participants having discontinued approved 

training as a percent of those having secured approval 22 1.4 9 1.6 8 1.6 5 0.9 

Participants having completed approved 

training as a percent of those having secured approval 256 16.6 93 16.1 83 16.3 80 17.4 

Source: Study Tracking System for the ITA Experiment (data extract as of January 27, 2003). Note: Analysis is restricted to dislocated workers enrolled in the ITA Experiment for one or more months.  *Difference relative to Approach 3 is significantly different from zero at the .10 level, two-tailed test  **Difference relative to Approach 3 is significantly different from zero at the .05 level, two-tailed test. ***Difference relative to Approach 3 is significantly different from zero at the .01 level, two-tailed test.
10 

training programs as those assigned to the other approaches (see next to last line in Table 4). As 

we noted, these findings are tentative, since the final outcomes for most ITA study participants 

have not yet been observed.5

Our preliminary analysis of ITA Experiment data thus suggests that PRA recipients who are 

interested in training may be highly likely to initiate it, since, like Approach 3 customers, they 

will face minimal barriers to entry into training. The ultimate rate of training among PRA 

recipients may nevertheless be low. PRA recipients can receive their remaining PRAs as 

reemployment bonuses if they become reemployed quickly. We believe that, early in their 

unemployment spells, most PRA recipients will try to qualify for the reemployment bonus. 

Since any money from the PRA spent on services would reduce the potential reemployment 

bonus, we expect most recipients to delay any expenditures on training until after the bonus 

qualification period and to pursue training only after they are unsuccessful in qualifying for the 

bonus. Moreover, we expect a substantial number of PRA recipients to qualify for 

reemployment bonuses.6 After the bonus qualification period ends, however, we expect most of 

the remaining recipients to enter training or spend their PRA resources on other support services. 

As noted earlier, it is too soon in our study to suggest how the training outcomes for PRA 

recipients may compare with those for individuals who initiate training under more counselordriven approaches. Nevertheless, an important consideration is that PRA recipients would have 

even more flexibility in selecting training programs and providers than Approach 3 customers. 

The training choices of ITA customers are restricted to options within Eligible Training Provider 

(ETP) Lists, which only include providers and programs that states have certified as meeting 

acceptable standards for quality and performance. At this point, PRA recipients are not expected 

to be subject to similar restrictions, and this could influence their training outcomes.7

 On the one 

hand, the ability to choose providers and programs outside of the ETP Lists may increase the 

number of PRA recipients who initiate training, as their selections will not be constrained by the 

 5

We examined this question further by reanalyzing training outcomes based on the sample of dislocated 

workers who had been enrolled in the experiment for four months or longer. When we used this more exclusive 

sample, the results were essentially unchanged. That is, differences in training completion or dropout rates—

conditional on having secured training approval—across the three approaches were not significant. However, four 

months after enrollment in the ITA experiment, many study participants are still unlikely to have completed their 

approved training programs.

6

According to data from the UI Exhaustees’ study, about 40 percent of UI claimants nationwide become 

reemployed within 15 weeks of filing their initial claims (Needels et al. 2001). We expect a similar proportion of 

PRA recipients to qualify for a reemployment bonus. As part of this special add-on to the ITA Experiment, we are 

conducting additional analyses and reviewing findings from existing research—on reemployment bonus 

experiments, worker profiling and reemployment services, and rates of UI benefit exhaustion—that could inform 

this and other questions related to the implementation of PRAs. We present these analyses in a second discussion 

paper. 

7

The proposed PRA program would not likely tie participants’ training selections to ETP Lists.
11 

lists.8

 On the other hand, if PRA recipients select providers who have been left off of the 

approved lists because of concerns about their quality or performance, their outcomes could be 

poorer than those observed ultimately in the ITA Experiment. 

D. What Are the Likely Per-Participant Costs of a PRA Program? 

• Our preliminary analysis of data from the ITA Experiment suggests that PRA 

recipients are likely to use up their full awards, whether or not they pursue 

training. 

Participants in the ITA Experiment who are assigned to Approach 3 receive a fixed ITA 

award—that is, all Approach 3 customers in a participating local area are offered the same ITA 

amount, with no exceptions. Approach 3 customers may use their ITA awards to pay for tuition, 

fees, and other training-related expenses. If the customer chooses a program that costs more than 

the ITA award, the local area pays only for costs up to the award amount. If the customer 

chooses a program that costs less than the ITA award, the local area pays only up to the 

program’s costs. Study participants may not use ITA funds for anything except training-related 

expenses. 

Data from the ITA Experiment show that, when local areas award Approach 3 customers a 

modest ITA, these customers tend to select programs that cost slightly more than their awards. 

Therefore, local areas spend, on average, slightly less per trainee than the ITA award amounts. 

As the second column of Table 5 shows, five of the local areas participating in the ITA 

Experiment set the value of their Approach 3 fixed ITAs at exactly $3,000—the proposed cap for 

PRAs. Our data show that ITA customers who receive these awards select programs that, on 

average, cost $3,026—slightly more than their ITA awards. Since some trainees select programs 

costing more than $3,000 and some select programs costing less, and the local area only pays up 

to the cap, the average amount spent per trainee is somewhat less than $3,000. As Table 5 

shows, across the local areas with $3,000 ITAs, average total expenditures per Approach 3 

trainee are $2,652. 

Since a substantial minority of ITA customers do not use their awards, local areas 

participating in the ITA Experiment spend much less per eligible ITA customer. As the first line 

in Table 3 shows, about 31 percent of Approach 3 customers never initiate ITA services and do

 8

Indeed, through site visits conducted as part of the ITA Experiment, we have learned that some ITA study 

participants may be giving up on ITA-funded training because the type of program or provider they want is not 

available as an approved option. Hence, this may also be a factor contributing uniformly to the relatively high rates 

of nonparticipation in ITA services across all approaches. 
12 

TABLE 5 

APPROACH 3 ITA AWARDS, TOTAL PROGRAM COSTS, AND PROJECTED LOCAL EXPENDITURES 

N 

Approach 3 Fixed 

ITA Awards 

Total Costs of 

Approved Programs

Ratio of Program 

Costs to ITA Award

Projected Local 

Expenditures 

Average Across All Grantees 497 $3,598 $3,455 0.9605 $3,006 Averages, by Grantee 

Phoenix, AZ 52 $3,000 $3,032 1.0106 $2,481 Maricopa County, AZ 34 $3,000 $4,003 1.3343 $2,764 Bridgeport, CT 12 $3,000 $3,145 1.0482 $2,745 Jacksonville, FL 67 $3,000 $3,427 1.1423 $2,846 Atlanta, GA 108 $5,000 $4,333 0.8666 $4,116 Northeast Georgia (RDC) 16 $4,000 $3,424 0.8559 $3,000 Northern Cook County, IL 143 $3,000 $2,594 0.8648 $2,589 Charlotte, NC 65 $4,000 $4,039 1.0097 $2,838 

Average Across Grantees with $3,000 Fixed ITAs 308 $3,000 $3,026 1.0087 $2,652 

Source: Study Tracking System for the ITA Experiment (data extract as of January 27, 2003). Note: Analysis is restricted to dislocated workers enrolled in the ITA Experiment for one or more months. RDC = Regional Development Commission. 
13 

not participate in training. Taking this factor into account, we estimate average ITA 

expenditures per eligible ITA customer at $1,556.9

Since the structure of, and target populations for, ITAs and PRAs differ, our ability to use 

these findings to comment on the likely costs of a PRA program is limited. However, assuming 

a $3,000 award, we expect average expenditures per eligible customer under PRAs to be higher, 

for two main reasons.10

First, PRA recipients who do not pursue training may collect a bonus instead. Under current 

proposals, those PRA customers who lose or never express interest in training—possibly because 

they receive a job offer and become reemployed—could receive a reemployment bonus. These 

customers might use up all the resources in their PRAs, even if they forgo any training services. 

This could increase average costs per eligible customer over what we see under Approach 3 in 

the ITA Experiment. 

Second, PRA recipients who do not collect a bonus would have more flexibility and strong 

incentives to spend their full award amounts. Under ITAs, when local staff feel confident that a 

customer will not pursue training or need further support with training expenses, they may cancel 

the award and release remaining funds to serve other local customers. Under current PRA 

proposals, customers who do not pursue training or do not spend their full award on training 

could still use the remaining funds for a variety of employment-related needs, including child 

care and relocation expenses. PRA recipients who pursue training may have an incentive to limit 

their training expenditures somewhat—to reserve PRA resources for anticipated employmentrelated needs. However, they would have no clear incentive to spend anything less than their full 

PRA awards. 

These factors combined suggest that, under PRAs, average costs per eligible customer could 

be very close to whatever value states specify for these awards. One factor that could restrain 

average costs per eligible PRA customer is if large numbers of individuals qualify for a first 

bonus installment, fail to qualify for the second, and are unable to spend their PRA balance on 

training and supportive services. As currently drafted, H.R. 444 stipulates that PRA recipients 

who obtain full-time employment before the end of their 13th week of UI benefits should receive 

the balance of their PRAs as a reemployment bonus.11 This bonus will be paid in two 

installments—60 percent at the time of reemployment and 40 percent no later than six months 

 9

We derived our estimate of average cost per ITA customer as follows. First, ITA data showed that 576 of the 

982 Approach 3 dislocated workers active in the ITA Experiment for one month or longer had secured program 

approval (Table 4). Second, we estimated average ITA expenditures of $2,652 per Approach 3 trainee in the local 

areas with $3,000 ITA caps (Table 5). Taking into account the 406 dislocated workers who failed to secure program 

approval, average costs per eligible Approach 3 customer under the ITA Experiment would then be $1,556—that is, 

[(576 × $2,652) + (406 × $0)] ÷ 982).

10Average PRA expenditures could, of course, be lower if the value of these accounts is set much lower than 

the value of ITAs. 

11Selected individuals will also be able to qualify for a reemployment bonus if they obtain full-time 

employment before the end of the 13th week after the date on which their account was established.
14 

after the date of reemployment. The draft legislation further specifies that individuals who 

qualify for a bonus and subsequently lose their jobs due to “a lack of work” may use the balance 

of their PRAs to purchase counseling, training, or supportive services. The draft legislation, 

however, leaves open to what extent other bonus recipients—for example, those who remain 

employed but need assistance with child care or transportation expenses, or decide to pursue 

training—could continue to spend resources out of their accounts. The more flexibility these 

individuals are given—either by states or in the final legislation—to spend PRA resources while 

waiting to qualify for their second bonus installment, the closer average costs per eligible PRA 

recipient are likely to be to the state-specified awards. 

REFERENCES 

Perez-Johnson, Irma, Paul Decker, Sheena McConnell, Rob Olsen, Jacqueline Anderson, Ronald 

D’Amico, and Jeffrey Salzman. “The Individual Training Account Experiment: Design 

Report.” Washington, DC: Mathematica Policy Research, Inc., September 2000. 

Needels, Karen, Walter Corson, and Walter Nicholson. “Left Out of the Boom Economy: UI 

Recipients in the Late 1990s.” ETA Occasional Paper 2002-03. Washington, DC: U.S. 

Department of Labor, Employment and Training Administration, October 2001. 
APPENDIX C 

IMPLICATIONS OF DIFFERENT PRA AMOUNTS FOR 

AVERAGE STATE AND LOCAL AREA 

TABLE C.1: FUNDING ALLOCATION FOR AN AVERAGE STATE AND LOCAL AREA

Local areas per state 11.15Local areas 591Reemployment rate: 32% 29% 25% 32% 29% 25%Second Installment rate: 81%Exp. Rate for servicees: 80%Base offer: $3,000 $2,000 $1,000 $3,000 $2,000 $1,000Funding not spent on customers: 7%First Installment Rate: 100%

For State: For Local Area

Total Fundin

g $3,600,000,000 $3,600,000,000 $3,600,000,000 $3,600,000,000 $3,600,000,000 $3,600,000,000

State/local share $67,924,528 $67,924,528 $67,924,528 $6,091,371 $6,091,371 $6,091,371Min. Amount to customers $63,169,811 $63,169,811 $63,169,811 $5,664,975 $5,664,975 $5,664,975Base Offer $3,000 $2,000 $1,000 $3,000 $2,000 $1,000Number of initial offers 21,057 31,585 63,170 1,888 2,832 5,665Prop. Of UI Pop. 

get offers 5.37% 8.05% 16.10% 5.37% 8.05% 16.10%

Reemployment Rate 32% 29% 25% 32% 29% 25%Number findin

g jobs in qual. 6,738 9,160 15,792 604 821 1,416

Number 

gettin

g 60% install. 6,738 9,160 15,792 604 821 1,416

Number 

gettin

g 40% install. 5,458 7,419 12,792 489 665 1,147

Total Costs of bonus 18,678,050 16,926,983 14,592,226 1,675,020 1,517,987 1,308,609Number usin

g services 14,318 22,425.2830 47,377 1,284 2,011 4,249

Estimated costs per servicee 2,400 1,600 800 2,400 1,600 800Total Costs of services $34,364,377 $35,880,453 $37,901,887 $3,081,746 $3,217,706 $3,398,985Total Costs $53,042,427 $52,807,435 $52,494,113 $4,756,766 $4,735,692 $4,707,594Total Costs per offeree $2,519 1,671.920 $ $831 $2,519 $1,672 $831

Funds left over $10,127,384 $10,362,376 $10,675,698 $908,209 $929,282 $957,381Offers per week 202 607 4859 18 27 54Additional offers 4,020 6,198 12,847 361 556 1,152Total offers 25,077 37,783 76,017 2,249 3,388 6,817Total offers per week 241 363 731 22 33 66Prop. of all UI recips 6.39% 9.63% 19.37% 6.39% 9.63% 19.37%

APPENDIX D 

FORMS AND NOTICES USED IN THE 

WASHINGTON REEMPLOYMENT 

BONUS DEMONSTRATION 

D.3
D.4
D.5
D.6
D.7
D.8
D.9
D.10
D.11
D.12
D.13
D.14
D.15
D.16
D.17
D.18
D.19
D.20
D.21
D.22
D.23