	Background

The UI program was established by Title III of the Social Security Act in  1935 and is a key component in ensuring the financial security of  America’s workforce. In fiscal year 2004,  these programs covered about 129 million wage and salary workers and  paid benefits totaling $41.3 billion to about 8.8 million workers. Moreover, we found that of the 76 percent who were eligible for UI  benefits at least once, 38 percent had ever received UI. 1.) Of  those who received UI benefits, 44 percent received them more than once;  this represents about 17 percent of all of the workers in this age group. Some UI-Eligible Workers are More Likely to Receive UI Benefits than Others, or to Have Longer Periods of Unemployment

When all other worker characteristics have been controlled for,  unemployed workers who are eligible for UI benefits are more likely to  receive UI if they had higher earnings before they became unemployed,  are younger, have completed more years of education, or if they have a  history of past UI benefit receipt. In addition, we found that unemployed  workers tend to have longer periods of unemployment if they receive UI  benefits, have completed fewer years of education, had lower earnings  before they became unemployed, or if they do not belong to unions. 2.) Unemployed Workers Who Received UI in the Past Are More Likely to Receive UI during Subsequent Unemployment

Of all the characteristics associated with UI benefit receipt, we found that  one—past UI receipt—had a particularly strong effect on the likelihood of  receiving UI benefits. Our results, however, suggest that this is  not because workers with past UI receipt from these industries are more  likely to receive UI benefits when they are unemployed than otherwise  similar workers from other industries. A Variety of Reemployment Services Are Available to Help UI Claimants Get Jobs, but Little Information Exists to Determine the Extent to Which Workers Use Them

In our review of states’ efforts to facilitate reemployment of UI claimants,  we found that across states, UI claimants have access to a variety of  reemployment services, and although most states accept UI claims  remotely by telephone or Internet, states make use of UI program  requirements to connect claimants with available services at various  points in their claims. Federal reporting requirements for states’ UI  programs and for federally funded employment and training programs do  not provide a full picture of services or outcomes, and few states monitor  the extent to which claimants are receiving these services or outcomes for  these claimants, in part because of limited information systems  capabilities. Although states must meet a number of federal reporting  requirements for their UI and employment and training programs, none of  these reports provides a complete picture of the services received or the  outcomes obtained by UI claimants, and only recently has Labor begun to  require that states provide information on the reemployment outcomes of  UI claimants. Last year, we recommended that the Department of Labor work with  states to consider the feasibility of collecting more comprehensive  information on UI claimants’ services and outcomes. Although Labor  generally agreed with our findings, Labor commented that current and  planned data collection efforts would provide sufficient information to  policy makers. Unemployment Insurance: Information on Benefit Receipt.
Why GAO Did This Study

Unemployment Insurance (UI) has been a key component in ensuring the financial security of America's workforce for over 70 years. In fiscal year 2004, UI covered about 129 million wage and salary workers and paid about $41 billion in benefits to nearly 9 million workers. With unemployed workers at a greater risk of long-term unemployment than in the past, it is increasingly important to understand how individual workers are being served by UI. This testimony draws upon the results of three GAO reports providing new information about (1) the extent to which individual workers ever receive UI benefits or receive benefits multiple times, (2) the types of workers who are more likely to receive UI, and (3) what is known about the extent to which UI beneficiaries receive reemployment services and their reemployment outcomes. GAO is not making new recommendations at this time. The Department of Labor (Labor) generally agreed with the findings from each of the three reports on UI, but took issue with GAO's recommendation that the Secretary work with states to consider collecting more comprehensive information on UI claimants' services and outcomes. Labor commented that, in its view, current and planned efforts would provide sufficient information for policy makers. However, we believe that Labor's efforts would not provide a complete picture of UI claimants' services and outcomes.

What GAO Found

On the basis of our analysis of a nationally representative sample of workers born between 1957 and 1964, we estimate that, while 76 percent of these workers experienced at least one period of unemployment during the first half of their working lives in which they would likely have been eligible for UI benefits, about 38 percent actually received UI. Of those who received UI benefits, 44 percent received them more than once. Among workers who are eligible to receive UI benefits, those who are more likely to actually receive these benefits are younger, have higher earnings before becoming unemployed, have completed more years of education, or have already received UI benefits in the past than otherwise similar workers. Past experience with the UI program has a particularly strong effect on the likelihood of receiving UI benefits. In addition, unemployed workers tend to have longer periods of unemployment if they receive UI benefits, have completed fewer years of education, have lower earnings before they become unemployed, or if they do not belong to unions. UI-eligible workers from certain industries, such as mining and manufacturing, are more likely than other workers to receive UI benefits. Across states, UI claimants have access to a variety of reemployment services, and states make use of UI program requirements to connect claimants with available services at various points in their claim. However, federal reporting requirements for states' UI programs and for federally funded employment and training programs do not provide a full picture of the services received or the outcomes obtained by all UI claimants, and few states monitor the extent to which claimants are receiving these services or outcomes for these claimants, in part because states' information systems have limited capabilities.