Targeting Reemployment Bonuses

Field experiments to evaluate the potential for using cash bonus of-fers to promote early return to work by unemployment insurance (UI) claimants were conducted in four states between 1984 and 1989. The first experiment was initiated by the Illinois Employment Security De-partment and yielded encouraging results. This led the U.S. Depart-ment of Labor to include a bonus treatment in the New Jersey reem-ployment experiment. Even though evidence from New Jersey was not strongly positive, to further clarify the findings from Illinois, the Labor Department sponsored multitreatment experiments in Pennsylvania and in Washington State. Results from the latter two experiments were not supportive of the idea that the reemployment bonus could be a cost-effective way to promote rapid reemployment, and policy momentum for the bonus idea faded. In 1994, the Clinton administration proposed to Congress a federal reemployment bonus program to be narrowly targeted to dislocated U