Personal reemployment accounts (PRAs) are a new strategy intended to help specific recipients of Unemployment Insurance (UI) build job skills and find work. PRAs are lump sum accounts of up to $3,000 that are fully managed by the unemployed worker and valid for one year. They are targeted to UI recipients who are likely to exhaust their benefits, and recipients can choose how and when to spend funds from their account to purchase reemployment services. PRA recipients may also elect to receive the funds as a bonus for reentering the workforce and keeping a job.

In 2004, the U.S. Department of Labor’s Employment and Training Administration (ETA) launched the PRA demonstration project as the first step in examining this new strategy. ETA selected seven states—Florida, Idaho, Minnesota, Mississippi, Montana, Texas, and West Virginia—to serve as PRA demonstration states. These states received a combined total of nearly $8 million to offer PRAs to a minimum of 2,270 unemployed workers. The evaluation of this project will cover the first two years of implementation and will involve both a qualitative and a quantitative study.

This interim report presents information about the first year of PRA implementation, based on telephone interviews and site visits to each state and an analysis of state quarterly data reports. Early findings include:

- PRAs have not significantly altered staffing or service delivery structures within the participating One-Stop Centers, and most sites do not have a staff position dedicated solely to PRAs.

- Overall, the states have maintained a high degree of flexibility and customer choice in the use of PRAs by placing limited, if any, restrictions on PRA recipients’ selection of training providers. States have also allowed PRA recipients to purchase a broad range of supportive services that help sustain a job search.

- Contact between One-Stop staff and PRA recipients is limited to the purpose of withdrawing account funds and occurs predominantly via telephone, email, or mail. There is no free access to career counseling and limited face-to-face contact overall.

- The early analysis suggests that PRA recipients will restrict spending on services in order to maximize the amount of a reemployment bonus. But, when funds are used to purchase services, the majority of spending is directed to supportive services in five of the seven states.