Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/172357 
Year of Publication: 
1993
Series/Report no.: 
Upjohn Institute Working Paper No. 93-22
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
Unemployment insurance is intended to reduce hardship by providing labor force members with partial wage replacement during periods of involuntary unemployment. However, in performing this income maintenance function, unemployment insurance may prolong spells of unemployment. Evidence from a field experiment conducted in Illinois in 1984 suggested that offering unemployment insurance claimants a modest cash bonus for rapid reemployment would increase the speed of return to work and reduce program costs. In 1988 a similar experiment, examining several different bonus offers, was conducted in Washington State. Evidence from the Washington experiment indicates that bonus offers do change job seeking behavior, but that only relatively generous bonus offers about six times the weekly benefit amount should be expected to significantly change the behavior of persons eligible for unemployment benefits.
Subjects: 
unemployment
insurance
bonus
experiment
Washington
O'Leary
JEL: 
J6
H5
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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