1.) Most States Use Statistical Models to Identify Claimants Likely to Exhaust Benefits, but Many Have Not Updated Them to Account for Changing Economic Conditions

The large majority of states use statistical models to identify  unemployment recipients who are most likely to exhaust benefits. Forty-five states use statistical models to identify and rank clients by their  likelihood to exhaust benefits, while 7 states use characteristic screens  that do not rank claimants. A survey of the states reveals that many have not revised or  updated their models in many years. Forty-five of the 53 states and territories use statistical models to identify  clients likely to exhaust benefits. One state, Florida, delegates the selection of  profiling tools to the local areas because state officials believe profiling  can be done more accurately at that level. 2.) Most Study States Did Not Take the In-Depth Approach Recommended by Labor to Ensure That Profiled Claimants Obtain Reemployment Services

Labor data provide a limited picture of states’ implementation of worker  profiling, and some aspects of these data were not reliable. These states generally referred claimants to services,  held them accountable for attending the services, and provided them with  an orientation and some instruction on job search skills. However, 6 of the  7 states did not adhere to Labor’s guidance recommending an in-depth  individual needs assessment and a tailored reemployment service plan for  referred UI claimants. Data Collected by Labor Provided a Limited Picture of States’ Implementation of Reemployment Services

Between 2002 and 2006, about 94 percent of the UI claimants who received  a first payment were profiled. Six of Seven States We Studied Referred Claimants and Enforced Compliance with Referrals

We found that 6 of the 7 study states had, as required by Labor, referred  profiled claimants to services and made claimants ineligible for benefits if  they failed to attend reemployment services. Little Is Known about Program’s Effectiveness because There Are No Current Studies and Labor’s Data Are of Limited Usefulness

Little is known about the current effectiveness of the worker-profiling  initiative. Most of the studies found that claimants who were referred to services  increased earnings in the year following the UI claim. 3. How do states identify unemployment claimants who are most  likely to exhaust benefits? To what extent do states provide reemployment services as  recommended by Labor? What is known about the effectiveness of the worker-profiling  initiative in accelerating the reemployment of unemployment  insurance claimants? To answer the second question, we reviewed Labor guidance regarding  reemployment services provided to Unemployment Insurance (UI)  claimants referred through the worker-profiling initiative, and obtained  and analyzed national data collected by the Department of Labor from  states on the Employment and Training Administration (ETA) 9048  Worker Profiling and Reemployment Services Activity report. As a  result, we took the following actions to ensure the accuracy of the data.
Why GAO Did This Study

Changes to the U.S. economy have led to longer-term unemployment. Many unemployed workers receive Unemployment Insurance (UI), which provided about $30 billion in benefits in 2006. In 1993, Congress established requirements--now known as the Worker Profiling and Reemployment Services (WPRS) initiative--for state UI agencies to identify claimants who are most likely to exhaust their benefits, and then refer such claimants to reemployment services. To assess the implementation and effect of the initiative, GAO examined (1) how states identify claimants who are most likely to exhaust benefits, (2) to what extent states provide reemployment services as recommended by the Department of Labor (Labor), and (3) what is known about the effectiveness of the initiative in accelerating reemployment. To answer these questions, we used a combination of national data; review of seven states, including visits to local service providers in four states; and existing studies and interviews with Labor and subject matter experts.

What GAO Found

Forty-five of the 53 states and territories use statistical models that facilitate the ranking of claimants by their likelihood to exhaust benefits, while 7 states use more limited screening tools that do not facilitate a ranking. Florida delegates the selection of profiling tools to local areas in the state. Factors used to determine the probability of exhaustion include a claimant's education, occupation, and job tenure. Many states have not regularly maintained their models, and as a result, the models in some states may not be accurately identifying claimants who are likely to exhaust benefits. Although Labor data provide a limited picture of states' implementation of the worker-profiling initiative, 6 of the 7 states we studied did not provide the in-depth approach to services as recommended by Labor. Overall, an average of 15 percent of profiled UI claimants were referred to reemployment services, and 11 percent completed these services between 2002 and 2006. Six of the 7 states we contacted referred claimants to services, held them accountable for attending the services, and provided an orientation. However, only 1 of the 7 states provided individualized needs assessments, and developed service plans, as recommended. Little is known about the effectiveness of the worker-profiling initiative as it is currently operating. Although studies using data from the 1990s generally indicated that claimants who were referred to services had reduced reliance on UI, there are no more up-to-date studies. Further, some of the program data collected by Labor are not reliable, and the data are not being used by Labor or states to evaluate the initiative.