This paper presents the principal findings of the most comprehensive study yet undertaken of payment errors in the unemployment insurance (UI) program. Among the five states studied—Illinois, Kansas, Louisiana, New Jersey, and Washington—the percentage of benefit weeks with payment errors ranged in 1981–82 from 12 percent to 52 percent, with an average of 26 percent. In each state, overpayments greatly exceeded underpayments, with inadequate job search efforts the primary cause of the overpayments found. The authors discuss the implications of their findings for previous research and for UI program administration.
Get full access to this article
View all access options for this article.
References
1.
AlchianArmen, and DemsetzHarold1972“Production, Information Costs and Economic Organization.”American Economic Review, Vol. 62, No. 5 (December), pp. 777–95.
2.
BarronJohn, and GilleyOtis1979“The Effect of Unemployment Insurance on the Search Process.”Industrial and Labor Relations Review, Vol. 32, No. 3 (April), pp. 363–66.
3.
BarronJohn, and MellowWesley1981“Changes in Labor Force Status among the Unemployed.”Journal of Human Resources, Vol. 16 (Summer), pp. 427–41.
4.
BarronJohn, and MellowWesley1979“Search Effort in the Labor Market.”Journal of Human Resources, Vol. 14 (Summer), pp. 389–404.
5.
BurgessPaul L., and KingstonJerry L.1985Overpayments, Adverse Incentives, and Reform of the Unemployment Compensation System. Mimeo. Washington, D.C.: National Chamber Foundation.
6.
BurgessPaul L., and KingstonJerry L.1976“The Impact of Unemployment Insurance Benefits on Reemployment Success.”Industrial and Labor Relations Review, Vol. 30, No. 1 (October), pp. 25–31.
7.
BurgessPaul L.KingstonJerry L., and St. LouisRobert D.1984“Unemployment Insurance: Identifying Payment Errors.”Monthly Labor Review, Vol. 107, No. 12 (December), pp. 34–37.
8.
BurgessPaul L.KingstonJerry L., and St. LouisRobert D.1982The Development of an Operational System for Defecting Unemployment Insurance Payment Errors Through Random Audits: The Result of Five State wide Pilot Tests. Washington, D.C.: U.S. Department of Labor, Unemployment Insurance Service.
9.
ClarkKim B., and SummersLawrence H.1982“Unemployment Insurance and Labor Market Transitions.” In BaileyMartin Neil, ed., Workers, Jobs, and Inflation. Washington, D.C.: Brookings Institution, pp. 279–318.
10.
EhrenbergRonald, and OaxacaRonald1976“Unemployment Insurance, Duration of Unemployment and Subsequent Wage Cain.”American Economic Review, Vol. 66 (December), pp. 754–66.
11.
FeldsteinMartin1982 Comments on ClarkKim B. and SummersLawrence H., “Unemployment Insurance and Labor Market Transitions,” in BaileyMartin Neil, ed., Workers, Jobs, and Inflation. Washington, D.C.: Brookings Institution, pp. 318–21.
12.
FlanaganRobert J.SmithRobert S., and EhrenbergRonald G.1984Labor Economics and Labor Relations. Clenview, Ill.: Scott Foresman.
13.
Kansas Department of Human Resources, Research and SectionAnalysis1982Kansas Nonfilers—1978. Topeka, April.
14.
KingstonJerry L., and BurgessPaul L.1981Unemployment Insurance Overpayments and. Improper Payments in Six Major Metropolitan Areas. Washington, D.C.: National Commission on Unemployment Compensation, May.
15.
KingstonJerry L.BurgessPaul L., and St. LouisRobert D.1981“Overpayments in the Unemployment Insurance System in the United States.”International Social Security Review, Vol. 34, No. 4, pp. 462–76.
16.
MarstonStephen T.1975“The Impact of Unemployment Insurance on Job Search.” Brookings Papers on Economic Activity, No. 1, pp. 13–48.
17.
PorterRichard S., and BayerAmanda S.1984“A Monetary Perspective on Underground Activity in the United States.”Federal Reserve Bulletin, Vol. 70 (March), pp. 177–90.
18.
PoterbaJames M., and SummersLawrence H.1984“Response Variation in the CPS: Caveats for the Unemployment Analyst.”Monthly Labor Review, Vol. 107 (March), pp. 37–43.
19.
St. LouisRobert D.BurgessPaul L., and KingstonJerry L.1986“Reported vs. Actual Job Search by Unemployment Insurance Claimants.”Journal of Human Resources, Vol. 21 (Winter), forthcoming.
20.
St. LouisRobert D.BurgessPaul L., and KingstonJerry L.1982UI Random Audit Program Operations Manual for Data Analysis. Washington, D.C.: U.S. Department of Labor, Unemployment Insurance Service, pp. 1–28.
21.
StoneJoe A.1980“Occupation Decisions of Unemployed Workers,” in National Commission on Unemployment Compensation, Unemployment Compensation.: Studies and Research, Vol. 2. Washington, D.C.: GPO, pp. 445–50.
22.
TanziVito1983“The Underground Economy in the United States, 1930–1980.”International Monetary Fund Staff Papers, Vol. 30 (June), pp. 283–305.
23.
U.S. Department of Labor, Office of Inspector General1985“Financing the Unemployment Insurance Program Has Shifted from a System Based on Individual Employer's Responsibility Towards a Socialized System.”Washington, D.C., pp. 1–36.
24.
U.S. Department of Labor, Unemployment Insurance Service1982ASelected Administrative Data on Benefit Payment Control Activities; State Programs. Washington, D.C., September.
25.
U.S. Department of Labor, Unemployment Insurance Service1982BUnemployment Insurance Quality Appraisal Results for 1982. Washington, D.C., May.
26.
ZuckermanStephen1982“An Analysis of Job Search with Varying Search Effort.” Mimeo. Paper prepared for the Econometrics Society meeting in New York City, December.
