The United States has maintained the longest consecutive period with less than 4% unemployment for decades. However, not all labor market measures are doing well. Despite low unemployment rates, the average duration of unemployment (how long workers have been looking for a job) has remained stubbornly high, at 19.5 weeks as of January 2024.
This is historically unusual. Before 2008, there were hardly any years when unemployment duration exceeded 20 weeks; after 2008, there were hardly any years when unemployment was below 20 weeks (the exceptions are 2008 and 2020, during which unemployment duration was relatively low because so many became unemployed). Something has shifted in the economy – for any given unemployment rate, the duration of unemployment is ten weeks longer than it would have been before the 2008 financial crisis and the subsequent lengthy output gap.
A recently proposed bipartisan bill, the Building on Reemployment Improvements to Deliver Good Employment (BRIDGE) for Workers Act, can help to reverse this. The BRIDGE for Workers Act would allow states to use the money for the Reemployment Services and Eligibility Assessments (RESEA) program – typically reserved for workers who are expected to exhaust their UI benefits – to instead use some of the funds for early intervention programs, allowing more workers who have become unemployed recently to access the program. Allowing this population to use RESEA services can help get them into work earlier.
The RESEA Program
RESEA is a Department of Labor program that gives grants to states to provide services to UI recipients. When launched in 2004 (at which point it was called the Reemployment and Eligibility Assessment (REA) program), only a handful of states received – what was then temporary–grant funding. A 2011 randomized trial of the Nevada REA program demonstrated that it was very effective at reducing unemployment duration, shortening average duration by almost three weeks. The Tax Cuts and Jobs Act (TCJA) of 2017 made the program permanent and expanded RESEA funding to all states. Congress subsequently increased total RESEA funding from $81 million in 2015 to $150 million in 2019.
The expansion of the RESEA program is a bright spot in an otherwise dire reemployment funding landscape. U.S. spending on reemployment services and other active labor market policies have fallen substantially in the last few decades.
States have substantial latitude in designing their specific RESEA programs, but there are several commonalities. UI claimants meet one-on-one with a jobs counselor to confirm continued unemployment insurance eligibility and review their recent work search activity. They then would get an overview of services provided at their local One Stop Center, are given labor market information for their industry and city, and work with the jobs counselor to develop a reemployment plan.
While RESEA may not appear to be a particularly innovative program, it is very effective. Many of the issues in reemployment are about being good at the basics–making sure people know how to write a resume, what the job market is like, or who is hiring in their local area. Applying for jobs is a numbers game – data from the Bureau of Labor Statistics suggests that it takes six job applications to land one interview, and only a third of people who have been interviewed get a job offer. Getting a job is a matter of slow persistence and managing setbacks.
Who Gets RESEA?
RESEA is a mandatory program. People assigned to receive RESEA services can lose their UI benefits if they do not attend a RESEA meeting (although this threat is not always realized).
Not all UI claimants are targeted for RESEA services. Each state was required to develop its specific worker profiling system under the Worker Profiling and Reemployment Service (WPRS) in 1993. WPRS uses algorithms that attempt to predict which UI claimants are most likely to exhaust their benefits (that is, who will not be able to find a job before their benefits expire). There are two issues with this approach. First, while states developed WPRS algorithms in 1993, they do not always update either the model or the parameters. A 2007 evaluation of WPRS found that 17 states had never updated their initial 1993 model, and 29 states had not changed their parameters since the initial design.
As time passes, an outdated model will become less accurate, making the program less effective. Different recessions will have different layoff and hiring patterns. For comparison, we can look at the divergent paths of construction and retail employees after the 2008 and 2020 recessions. Construction employment lagged retail after 2008 but leaped ahead of retail after 2020. An algorithm that was trained on the 2008 recession would suggest construction workers as RESEA targets in 2020, but that would have led to improper targeting.
Second, it needs to be clarified if the candidates who are most likely to exhaust their benefits are necessarily those most likely to benefit from RESEA services. Across several randomized trials, there was no consistent relationship between the estimated probability that a worker would exhaust their benefits and the effect of the RESEA program.
The BRIDGE for Workers Act, sponsored by Senators Chris Coons (D-Del.), Bill Cassidy, M.D. (R-La.), Tim Kaine (D-Va.), and Thom Tillis (R-N.C.) and Representatives Darren LaHood (R-IL) and Danny Davis (D-IL), changes this by officially allowing states to target any UI claimant for RESEA services. This effectively codifies an understanding communicated to states through individual appropriation bills, which have indicated this flexibility. According to NASWA, 59% of states already offer RESEA services more broadly, and this bill would encourage states to make these programs permanent.
This change means that RESEA services can be offered more broadly and that people who receive them will receive them faster. There is a substantial lag between applying for unemployment insurance, being processed by the WPRS or state algorithm, and being informed of eligibility for the RESEA program.
Getting early access to RESEA services is crucial. There is a wealth of information and guidance available at local American Job Centers (AJCs), but many UI claimants do not effectively use the services. Job seekers tend to be overly optimistic about how long it will take them to find a job. For example, one survey of unemployed workers found that the average worker expected it would take 6.8 weeks to find a job; in a follow-up survey, the actual average was 23 weeks (three times longer than expected). Many people only come to AJCs when they have almost entirely exhausted their UI benefits, but have yet to find a job. They are then frustrated to see that, while the job center provides many services, it cannot guarantee that the claimant will be able to walk out with a job immediately. Instead, AJCs provide guidance on job search, resume building, and interviews that can help lay a strong foundation. Still, even with that assistance the search itself will take substantial time.
By giving RESEA access to workers earlier, the BRIDGE for Workers Act, can help this.By expanding access to the RESEA program, this legislation allows states to better target this program to the workers who are most likely to gain from it, not merely those who are likely to exhaust their UI benefits. Supporting initiatives that facilitate swift reintegration into the workforce is not just beneficial; it is essential for sustaining our economic vitality and social fabric.