unemployment insurance and reemployment among older workers
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Unemployment Insurance and Reemployment among Older Workers. Randall W. Eberts and Christopher J. O’Leary W. E. Upjohn Institute for Employment Research www.upjohninstitute.org - PowerPoint PPT PresentationTRANSCRIPT
Unemployment Insurance and Reemployment among Older Workers
Randall W. Eberts and Christopher J. O’Leary W. E. Upjohn Institute for Employment Research
www.upjohninstitute.org
Prepared for the National Academy of Social Insurance conference “Older and Out of Work: Jobs and Social Insurance for a Changing Economy,” January
19-20, 2006, National Press Club, Washington, DC.
Unemployment Insurance and Reemployment among Older Workers
1. Background
2. Samples and Methodology
3. Reemployment of UI Applicants by Age
4. Reemployment Earnings by Age
5. Reemployment Job Tenure by Age
6. Summary and Conclusions
1. Background: Prospects for Older Workers
• Rising Risk of Job Loss Farber (1997)
• Greater Time to Reemployment and Earnings LossChan and Stevens (2001)
• Smaller Share of Jobless and Higher UI RecipiencyO’Leary and Wandner (2001)
• Older and Longer Job Tenure, Human Capital LossBLS (2004)
• Among UI applicants, how do older and younger Beneficiaries, non-Beneficiaries, and Exhaustees fare in terms of employment, earnings, and job stability?
Age <=24 25-34 35-44 45-54 55-64 >=65
UI 9.7 23.6 26.6 24.0 12.6 2.9
LF 15.4 22.2 25.5 22.5 11.3 3.1
Un 32.0 22.6 20.2 15.7 7.6 1.9
Age Distribution of Labor Force, Unemployment, and UI Receipt in the United States, 2002
<=2425-34
35-4445-54
55-64>=65
Pct of UI Recipients
Pct of LF
Pct of Unemployed0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Age Distribution of Labor Force, Unemployment, and UI Receipt in the United States, 2002
2. Sample and Methodology
• UI Applicants in Ohio, 2001• Three years of quarterly follow-up data• Data on Characteristics and Quarterly Earnings
• Descriptive Transition Matrices• Based on Quarterly Earnings Records
(Employment, Earnings, Employer Stability)
Outcomes and Characteristic Means for UI Beneficiaries Age 30-65 in Ohio, 2001
Overall Older Younger
Sample Size (Claims) 287,780 78,549 209,231
Full-Time Equivalent Weeks of UI 14.9 14.7 14.9
Exhausted Regular UI 0.321 0.330 0.318
Fraction of Entitlement/Benefits Used 0.579 0.572 0.582
Employed One Quarter After Benefit Year Begin 0.651 0.642 0.655
Base Period Earnings $31,736 $35,854 $30,189
Entitlement Length (Weeks) 25.8 25.8 25.8
Weekly Benefit Amount 273 275 272
WBA at Maximum 0.216 0.192 0.225
Work Search Exempt 0.316 0.342 0.306
Characteristic Means for UI Beneficiaries Age 30-65 in Ohio, 2001
Overall Older Younger
Age as of BYB 43.8 55.0 39.6
Gender, Female 0.330 0.326 0.331
Race, White (*1) 0.834 0.858 0.826
Race, African American 0.124 0.103 0.131
Race, Hispanic 0.020 0.015 0.021
Education, Less than High School 0.197 0.225 0.187
Education, High School Grad / GED 0.506 0.482 0.515
Education, Some College 0.197 0.190 0.200
Education, Bachelor Degree or Higher 0.099 0.103 0.098
3. Reemployment of UI Applicants by Age
• Ohio UI Beneficiaries – Older have lower re-employment rates
• Ohio non-UI Beneficiaries– Delay in re-employment greatly reduces
subsequent probability of employment
• Ohio UI Exhaustees – Recover from low early rates of reemployment
Ohio Regular UI Beneficiaries for 2001
Employment Probabilities for Older UI Beneficiaries in Ohio Gaining Reemployment t Quarters After UI Application
1 2 3 4 5 6 7 8 9 10 11
77,152 0.645 0.566 0.551 0.527 0.514 0.508 0.504 0.481 0.477 0.470 0.467
49,744 0.338 0.296 0.277 0.203 0.260 0.257 0.245 0.190 0.237 0.235
9,277 0.205 0.171 0.151 0.148 0.147 0.144 0.138 0.138 0.139
3,717 0.145 0.113 0.105 0.101 0.100 0.098 0.097 0.097
2,097 0.098 0.077 0.071 0.067 0.066 0.063 0.062
1,205 0.074 0.057 0.053 0.050 0.049 0.048
818 0.052 0.041 0.038 0.037 0.034
540 0.040 0.034 0.029 0.027
386 0.049 0.032 0.039
460 0.033 0.026
293 0.028
Ohio Regular UI Beneficiaries for 2001
Employment Probabilities for Younger UI Beneficiaries in Ohio Gaining Reemployment t Quarters After UI
1 2 3 4 5 6 7 8 9 10 11
186,682 0.653 0.582 0.572 0.553 0.545 0.545 0.541 0.523 0.527 0.531 0.529
121,979 0.402 0.364 0.342 0.259 0.324 0.320 0.309 0.251 0.309 0.308
26,010 0.267 0.228 0.203 0.201 0.200 0.194 0.187 0.190 0.192
10,312 0.205 0.165 0.156 0.150 0.148 0.143 0.142 0.141
5,821 0.139 0.112 0.104 0.097 0.095 0.093 0.091
3,138 0.114 0.093 0.084 0.078 0.081 0.076
2,221 0.087 0.070 0.062 0.060 0.059
1,488 0.065 0.053 0.048 0.046
1,027 0.062 0.049 0.045
913 0.052 0.042
710 0.046
Employment Rates Among Older UI Beneficiaries in Ohio, 2001
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Em
plo
ym
en
t R
ate
Employment Rates Among Younger UI Beneficiaries in Ohio, 2001
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Em
plo
ym
en
t R
ate
Ratio of Older-to-Younger Employment Rates for UI Beneficiaries in Ohio, 2001
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Ra
tio
of
Em
plo
ym
en
t R
ate
s
Reemployment Probabilities Among UI Beneficiaries in Ohio, 2001
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Ree
mpl
oym
ent P
roba
bilit
y
Old, Ben
Yng, Ben
Employment Rates Among Older Non-UI Beneficiaries in Ohio, 2001
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Em
plo
ym
en
t R
ate
Employment Rates Among Younger Non-UI Beneficiaries in Ohio, 2001
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Em
plo
ym
en
t R
ate
Ratio of Older-to-Younger Employment Rates for Non-UI Beneficiaries in Ohio, 2001
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Ra
tio
of
Em
plo
ym
en
t R
ate
s
Reemployment Probabilities Among Beneficiaries and Non-Beneficiaries in Ohio, 2001
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Re
em
plo
ym
en
t P
rob
ab
ility
Old, Ben
Yng, Ben
Old, Non
Yng, Non
Reemployment Probabilities Among Beneficiaries, Non-Beneficiares and Exhaustees in Ohio, 2001
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
1 2 3 4 5 6 7 8 9 10 11
Quarters AFter Benefit Year Begin Date
Re
em
plo
ym
en
t P
rob
ab
ility
Old, Ben
Yng, Ben
Old, Non
Yng, Non
Old, Exh
Yng, Exh
3. Policy Issues on Employment• UI Applicants who gain speedy return to work
have a greatly increased chance of steady future employment.
• Employment handicap is particularly pronounced for non-UI Beneficiaries.
• Employment recovery is delayed for exhaustees.
• Those gaining reemployment more quickly are harmed less by job loss.
4. Reemployment Earnings by Age
• Relative to earnings before UI Application– Earnings for older UI Beneficiaries are lower
and recover less when reemployment is delayed
– Reemployment earnings for older non-UI Beneficiaries recover to exceed prior earnings
– Reemployment earnings of older UI exhaustees recover slower and less than younger UI exhaustees
Avg Pre Ratio of Post-to-Pre Earnings for Older Ohio UI Beneficiaries in 2001 for Those Re-Employed n Quarters After BYB
NumberQtr
Earn BYB+1 BYB+2 BYB+3 BYB+4 BYB+5 BYB+6 BYB+7 BYB+8 BYB+9 BYB+10 BYB+11
49,726 9,614 0.79 1.02 1.01 0.97 0.98 1.07 1.03 1.00 0.98 1.05 1.07
9,272 8,502 0.65 1.05 0.90 0.86 0.98 1.09 0.97 0.87 0.99 1.10
3,716 8,761 0.47 0.76 0.78 0.80 0.84 0.85 0.83 0.84 0.88
2,094 9,087 0.45 0.73 0.82 0.78 0.80 0.79 0.84 0.86
1,205 9,806 0.44 0.82 0.83 0.86 0.83 0.87 0.91
816 9,178 0.41 0.69 0.68 0.68 0.71 0.79
539 8,974 0.43 0.72 0.69 0.71 0.82
385 9,613 0.39 0.66 0.64 0.66
460 10,532 0.51 0.76 0.58
293 9,879 0.42 0.66
237 9,627 0.37
Avg Pre Ratio of Post-to-Pre Earnings for Younger Ohio UI Beneficiaries in 2001 for Those Re-Employed n Quarters After BYB
NumberQtr
Earn BYB+1 BYB+2 BYB+3 BYB+4 BYB+5 BYB+6 BYB+7 BYB+8 BYB+9 BYB+10 BYB+11
121,897 7,855 0.84 1.12 1.13 1.08 1.09 1.20 1.18 1.15 1.14 1.23 1.25
25,994 7,313 0.75 1.19 1.05 0.99 1.13 1.26 1.16 1.08 1.19 1.32
10,294 7,118 0.61 0.95 0.95 0.98 1.04 1.08 1.07 1.10 1.16
5,813 7,186 0.54 0.90 0.93 0.97 1.01 1.02 1.05 1.07
3,133 7,684 0.50 0.93 0.94 0.96 1.00 1.06 1.09
2,218 7,268 0.59 1.00 1.02 1.04 1.03 1.16
1,486 7,304 0.56 0.97 0.96 1.05 1.05
1,025 7,130 0.59 1.04 1.07 1.16
910 7,621 0.54 0.93 0.93
709 7,422 0.54 0.94
604 7,000 0.64
Ratio of Post-to-Pre Earnings for Older UI Beneficiaries Reemployed n Quarters After BYB in Ohio, 2001
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Ra
tio
of
Po
st-
to-P
re E
arn
ing
s
Ratio of Post-to-Pre Unemployment Earnings for Younger UI Beneficiaries Reemployed n Quarters After BYB in Ohio, 2001
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Rat
io o
f Pos
t-to-
Pre
Ear
ning
s
Ratio of Older-to-Younger Post-to-Pre Earnings for UI Beneficiaries Reemployed n Quarters After BYB in Ohio, 2001
0.75
0.80
0.85
0.90
0.95
1.00
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Old
er-
to-Y
ou
ng
er
Ra
tio
4. Policy Issues on Earnings
• Delay in reemployment delays earnings recovery
• Non-beneficiaries gaining reemployment show earnings gains
• Older UI exhaustees do not return to prior earnings levels
• Early reemployment of Applicants
5. Reemployment Job Tenure by Age
• Older UI Applicants who gain reemployment establish firmer attachments to hiring employers
• Employer attachment is stronger for those gaining reemployment sooner
2001 Probability of Older (50-65) Ohio UI Beneficiaries Staying with First Major Employer for those Re-Employed n Quarters After BYB Date
Number BYB+1 BYB+2 BYB+3 BYB+4 BYB+5 BYB+6 BYB+7 BYB+8 BYB+9 BYB+10 BYB+11
77,152 49,744 9,277 3,717 2,097 1,205 818 540 386 460 293 239
49,744 1.00 0.87 0.80 0.74 0.71 0.68 0.66 0.64 0.62 0.60 0.59
9,277 1.00 0.83 0.74 0.62 0.64 0.61 0.57 0.46 0.52 0.50
3,717 1.00 0.81 0.68 0.60 0.55 0.51 0.48 0.45 0.43
2,097 1.00 0.81 0.68 0.61 0.56 0.51 0.47 0.43
1,205 1.00 0.83 0.72 0.65 0.59 0.56 0.51
818 1.00 0.88 0.73 0.67 0.61 0.56
540 1.00 0.89 0.76 0.69 0.62
386 1.00 0.85 0.74 0.67
460 1.00 0.83 0.79
293 1.00 0.88
239 1.00
2001Probability of Younger (30-49) Ohio UI Beneficiaries Staying with First Major Employer for those Re-Employed n Quarters After BYB
Date
Number BYB+1 BYB+2 BYB+3 BYB+4 BYB+5 BYB+6 BYB+7 BYB+8 BYB+9 BYB+10 BYB+11
186,682 121,979 26,010 10,312 5,821 3,138 2,221 1,488 1,027 913 710 604
121,979 1.00 0.82 0.72 0.65 0.61 0.58 0.55 0.52 0.51 0.49 0.47
26,010 1.00 0.81 0.69 0.55 0.57 0.53 0.49 0.38 0.44 0.41
10,312 1.00 0.77 0.60 0.51 0.46 0.42 0.38 0.35 0.33
5,821 1.00 0.77 0.62 0.53 0.48 0.43 0.39 0.36
3,138 1.00 0.81 0.65 0.56 0.50 0.46 0.42
2,221 1.00 0.83 0.68 0.59 0.55 0.50
1,488 1.00 0.85 0.72 0.63 0.57
1,027 1.00 0.83 0.68 0.59
913 1.00 0.86 0.72
710 1.00 0.86
604 1.00
Ratio of Probability of Staying with First Major Employer for Older to Younger UI Beneficiaries Re-Employed n Quarters After BYB Date
BYB+1 BYB+2 BYB+3 BYB+4 BYB+5 BYB+6 BYB+7 BYB+8 BYB+9 BYB+10 BYB+11
1.000 1.062 1.113 1.143 1.162 1.173 1.196 1.220 1.228 1.229 1.245
1.000 1.032 1.081 1.130 1.124 1.145 1.160 1.210 1.192 1.215
1.000 1.059 1.127 1.168 1.195 1.215 1.269 1.301 1.303
1.000 1.043 1.100 1.156 1.170 1.202 1.193 1.208
1.000 1.030 1.106 1.147 1.188 1.235 1.204
1.000 1.058 1.071 1.142 1.110 1.129
1.000 1.045 1.058 1.104 1.082
1.000 1.021 1.088 1.130
1.000 0.970 1.096
1.000 1.017
1.000
Probability of Staying with the First Major Employer for Older UI Beneficiaries in Ohio, 2001
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Pro
ba
bili
ty o
f S
tay
ing
Probability of Staying with the First Major Employer for Younger UI Beneficiaries in Ohio, 2001
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Pro
ba
bili
ty
Ratio of the Probability of Staying with the First Major Employer for Older-to-Younger UI Beneficiaries in Ohio, 2001
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1 2 3 4 5 6 7 8 9 10 11
Quarters After Benefit Year Begin Date
Ra
tio
of
Pro
ba
bili
tie
s
6. Summary and Conclusions
• UI Beneficiaries – Older have lower re-employment rates• non-UI Beneficiaries – Delay in re-employment greatly
reduces probability of employment• UI Exhaustees – Recover quickly from low early rates of
reemployment• Earnings recovery is lower among older UI Applicants• Employer attachment is stronger among older applicants
gaining reemployment
• Early reemployment efforts could benefit all categories of UI applicants
Unemployment Insurance and Reemployment among Older Workers
Randall W. Eberts and Christopher J. O’Leary W. E. Upjohn Institute for Employment Research
www.upjohninstitute.org
Prepared for the National Academy of Social Insurance conference “Older and Out of Work: Jobs and Social Insurance for a Changing Economy,” January
19-20, 2006, National Press Club, Washington, DC.