1. Unemployment Insurance and Reemployment among Older Workers
Randall W. Eberts and Christopher J. O’Leary
W. E. Upjohn Institute for Employment Research
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.

2. 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
Reemployment Job Tenure by Age
Summary and Conclusions

3. 1. Background: Prospects for Older Workers
Rising Risk of Job Loss
Farber (1997)
Greater Time to Reemployment and Earnings Loss
Chan and Stevens (2001)
Smaller Share of Jobless and Higher UI Recipiency
O’Leary and Wandner (2001)
Older and Longer Job Tenure, Human Capital Loss
BLS (2004)
Among UI applicants, how do older and younger Beneficiaries, non-Beneficiaries, and Exhaustees fare in terms of employment, earnings, and job stability?

4. Age Distribution of Labor Force, Unemployment, and UI Receipt in the United States, 2002
<=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

6. 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)

7. 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
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
Weekly Benefit Amount
273
275
272
WBA at Maximum
0.216
0.192
0.225
Work Search Exempt
0.316
0.342
0.306

8. 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
0.190
0.200
Education, Bachelor Degree or Higher
0.099
0.098

9. 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

10. 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
0.139
3,717
0.145
0.113
0.105
0.101
0.100
0.098
0.097
2,097
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
0.029
0.027
386
0.032
0.039
460
0.033
0.026
293
0.028

11. 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
0.541
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
0.308
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
0.084
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
0.049
0.045
913
0.052
0.042
710

21. 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.

22. 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

23. Avg Pre
Ratio of Post-to-Pre Earnings for Older Ohio UI Beneficiaries in 2001 for Those Re-Employed n Quarters After BYB
Number
Qtr 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
1.05
9,272
8,502
0.65
0.90
0.86
1.09
0.87
0.99
1.10
3,716
8,761
0.47
0.76
0.78
0.80
0.84
0.85
0.83
0.88
2,094
9,087
0.45
0.73
0.82
1,205
9,806
0.44
0.91
816
9,178
0.41
0.69
0.68
0.71
539
8,974
0.43
0.72
385
9,613
0.39
0.66
0.64
460
10,532
0.51
0.58
293
9,879
0.42
237
9,627
0.37

24. Avg Pre
Ratio of Post-to-Pre Earnings for Younger Ohio UI Beneficiaries in 2001 for Those Re-Employed n Quarters After BYB
Number
Qtr 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
1.26
1.16
1.32
10,294
7,118
0.61
0.95
0.98
1.04
1.07
1.10
5,813
7,186
0.54
0.90
0.93
0.97
1.01
1.02
3,133
7,684
0.50
0.94
0.96
1.00
1.06
2,218
7,268
0.59
1.03
1,486
7,304
0.56
1,025
7,130
910
7,621
709
7,422
604
7,000
0.64

28. 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

29. 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

30. 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
1.00
0.87
0.80
0.74
0.71
0.68
0.66
0.64
0.62
0.60
0.59
0.83
0.61
0.57
0.46
0.52
0.50
0.81
0.55
0.51
0.48
0.45
0.43
0.56
0.47
0.72
0.65
0.88
0.73
0.67
0.89
0.76
0.69
0.85
0.79

31. 2001
Probability 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
1.00
0.82
0.72
0.65
0.61
0.58
0.55
0.52
0.51
0.49
0.47
0.81
0.69
0.57
0.53
0.38
0.44
0.41
0.77
0.60
0.46
0.42
0.35
0.33
0.62
0.48
0.43
0.39
0.36
0.56
0.50
0.83
0.68
0.59
0.85
0.63
0.86

32. 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
1.032
1.081
1.130
1.124
1.145
1.160
1.210
1.192
1.215
1.059
1.127
1.168
1.195
1.269
1.301
1.303
1.043
1.100
1.156
1.170
1.202
1.193
1.208
1.030
1.106
1.147
1.188
1.235
1.204
1.058
1.071
1.142
1.110
1.129
1.045
1.104
1.082
1.021
1.088
0.970
1.096
1.017

36. 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

37. Unemployment Insurance and Reemployment among Older Workers
Randall W. Eberts and Christopher J. O’Leary
W. E. Upjohn Institute for Employment Research
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.