UI Waiting Week report

Some of my IRP colleagues and I wrote a report for the Wisconsin Department of Workforce Development regarding the UI waiting week. You can find the report here

Link to IRP-Analysis-WI-Unemployment-Waiting-Period-Report (PDF)

and the title, authors and abstract below.

What surprised me most when working on this report was the almost complete absence of any discussion of UI waiting weeks in the literature. The waiting week in UI, which many states have but suspended during the pandemic, basically means that the first compensable week is the second week of the claim. The waiting week does not affect the number of weeks a claimant is eligible for but rather tries to deter very short claims by adding a week before the benefit payments begin. SSDI, the main disability program in the US, has a long waiting period, and there is a large literature about it, but the short UI waiting week has not attracted similar attention from scholars.

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Analysis Of The Unemployment Insurance Waiting Period In Wisconsin

Jeffrey Smith, Yonah Drazen, Steven Cook, and Hilary Shager

November 30 2020

WI-UI-Report-2020

DWD asked IRP to investigate whether the one-week waiting period policy introduced into Wisconsin’s unemployment insurance (UI) system on January 1, 2012 had effects on claimant outcomes related to UI receipt and use of other social and employment training programs. In particular, this report addresses three research questions, which we list along with our answers.

1) What are the policies other jurisdictions have in place regarding unemployment compensation waiting periods, and how does Wisconsin compare?

Most other states have a one-week Unemployment Insurance (UI) waiting period (though many states waived this following the onset of the COVID-19 pandemic). There is a long history of such waiting periods both in the United States and in other developed countries. In recent decades, the usual motivation centers on discouraging UI enrollment by eligible workers expecting very short claims.

2) Did the amount of time participants claimed benefits change in response to the introduction of the waiting period?

We find weak evidence of an increase in the average duration of claims following the introduction of the waiting week. The increase occurs only among claimants required to actively search for work based on their Eligibility Review Period (ERP) code and does not attain conventional levels of statistical significance. We interpret this as weak evidence that the waiting week deters claims by workers who would have short claims and be required to search.

3) Were claimants more likely to also participate in other safety net programs (FoodShare or Medical Assistance) in response to the introduction of the waiting period?

We find no evidence of an effect of the waiting week policy on claimant receipt of FoodShare, Medicaid. Similarly, we find no evidence of an effect on participation in training funded by the Workforce Investment Act(WIA).