UNEMPLOYMENT INSURANCE PROGRAM LETTER No.25-03

Employment and Training Administration
Advisory System

U.S. Department of Labor
Washington, D.C. 20210

CLASSIFICATION
UI

CORRESPONDENCE SYMBOL
OWS/DPM

DATE
April 25, 2003

ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER No.25-03

TO: ALL STATE WORKFORCE AGENCIES

FROM: CHERYL ATKINSON /s/
Administrator
Office of Workforce Security

SUBJECT: Request for State Participation in a Pilot Test to Measure the Reemployment Rate of Unemployment Insurance (UI) Claimants

1. Purpose.To solicit the participation of four state UI agencies to test a measure of the reemployment rate of UI claimants.
2. Reference. Unemployment Insurance Program Letter (UIPL) No. 15-03, "Government Performance and Results Act (GPRA) Fiscal Year 2003 Unemployment Insurance (UI) Program Goals" (January 22, 2003).
3. Background. The Employment and Training Administration (ETA) defined the following four GPRA goals for the UI program in FY 2002 to achieve a balanced expression of the UI program's benefit payment, tax, and reemployment facilitation responsibilities:

Make Timely Benefit Payments to Unemployed Workers
Establish Tax Accounts Promptly
Improve Payment Accuracy for Unemployed Workers
Facilitate the Reemployment of Claimants

RESCISSIONS EXPIRATION DATE

None April 30, 2004

ETA has established measures for all four goals and established criteria for the first three. As discussed in UIPL No. 15-03, ETA determined that an entered employment measure -- the rate at which UI claimants become reemployed -- best reflects how well the UI system facilitates the reemployment of UI claimants. Although states measure the reemployment rates of certain categories of job seekers in the ETA 9002C, 9002D (veterans), and 9049 (UI claimants referred to reemployment service through profiling) reports, no current reporting system measures how well the UI program facilitates the reemployment of UI claimants. Therefore, we are soliciting state participation to test a procedure for measuring the reemployment of UI claimants. Data from this test will be used to establish a reemployment baseline that will be used to establish a national goal for GPRA.

4. The Measure. ETA carefully considered several options for measuring the reemployment of UI claimants and concluded that a crossmatch of the Social Security Numbers (SSN) of all claimants who received intrastate first payments in a quarter against the intrastate wage records for the subsequent two quarters is the best method for obtaining reemployment data. Using wages as a proxy for employment, this measure will show the percent of intrastate claimants who become reemployed within one and two quarters of receiving a first UI payment.

We believe that this is the best method for measuring reemployment because it:

includes most of the UI claimant population;

will yield entered employment rates that have no sampling variability;

should be reasonably easy to program because it so closely resembles the current Benefit Payment Control wage record crossmatch;

is similar in concept to Workforce Investment Act outcome measures that use wage record data; and

will not require extensive state staff time.

The pilot will include a crossmatch of only intrastate wage records. For national implementation of this measure, we will pursue the technical changes required to crossmatch the files of UI claimants receiving first payments through the UI Interstate Connection (ICON) to identify wages of out-of-state employers. However, we do not want to delay the pilot until these changes are completed. We believe that the pilot will demonstrate the feasibility of the proposed methodology and will yield results that can be used to make reliable reemployment estimates.

Using benefit year earnings data collected by the Benefit Accuracy Measurement program, DOL will adjust reemployment rates based on intrastate and interstate wage record crossmatches to reflect earnings attributable to the claimant's former employer (for example, severance pay or vacation pay issued by a claimant's base period employer) and earnings from employment during the claimant's benefit year that result in partial UI payments.

From its inception, the UI program has established eligibility requirements that promote claimant reemployment, such as the requirement that UI claimants be able to work and available for work. State actions to facilitate reemployment include periodic reviews of claimants' job searches, the federally required claimant profiling, and referral to reemployment services available through the Labor Exchange and One-Stop system.

By analyzing state entered employment rates, we hope to identify states that are facilitating reemployment and gain insight from them into the combination of reemployment services and UI eligibility conditions and their enforcement that results in the quickest return to suitable work for UI claimants. Our findings will then be disseminated to states as guidance for implementing best practices that support rapid reemployment. We hope that using an outcome-based measure will encourage state UI program staff -- those closest to their own labor markets -- to be innovative in the steps they take to facilitate reemployment and will promote the coordination of UI and One-Stop reemployment services.

5. Pilot Description. To acquire recent information in the shortest period of time, states participating in the pilot will be asked to identify persons who received a first payment in each quarter of calendar year (CY) 2002. The states will then crossmatch the SSN of the claimants with the UI wage records for each of the two quarters following the quarter of first payment and count every match for those SSNs with wages. The one-quarter and two-quarter entered employment rates will equal the ratios of total wage record matches in each of the quarters to the number of claimants who receive a first payment, adjusted for severance and vacation pay and partial unemployment, as described in section 4. The Department of Labor (DOL) will collect no information that identifies an individual. Technical specifications are attached.

ETA will enter into a cooperative agreement with up to four states to conduct the pilot. Each state will receive up to $2,500 for costs incurred for programming, conducting the crossmatches, and reporting the results.

In addition to providing the entered employment rates, pilot states will be asked to provide cost estimates for both initial programming and quarterly run costs. All pilot data must be provided to the National Office no later than September 30, 2003.

6. Action Required. State agencies that are interested in participating in the pilot should notify their ETA Regional Administrator and the National Office no later than May 30, 2003. National Office notification should be addressed to Andrew Spisak at spisak.andrew@dol.gov or at the following address:

7. Inquiries.Direct questions to the appropriate Regional Office.

8. Attachments.

Technical Specifications for the UI Measure for Reemployment Facilitation.

ADVISORY:	UNEMPLOYMENT INSURANCE PROGRAM LETTER No.25-03


TO:	ALL STATE WORKFORCE AGENCIES

FROM:	CHERYL ATKINSON /s/ Administrator Office of Workforce Security